Correlation Between SWISS WATER and United Natural
Can any of the company-specific risk be diversified away by investing in both SWISS WATER and United Natural at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining SWISS WATER and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and United Natural Foods, you can compare the effects of market volatilities on SWISS WATER and United Natural and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in SWISS WATER with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and United Natural.
Diversification Opportunities for SWISS WATER and United Natural
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between SWISS and United is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods and SWISS WATER is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on SWISS WATER DECAFFCOFFEE are associated (or correlated) with United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of SWISS WATER i.e., SWISS WATER and United Natural go up and down completely randomly.
Pair Corralation between SWISS WATER and United Natural
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the United Natural. In addition to that, SWISS WATER is 1.47 times more volatile than United Natural Foods. It trades about -0.27 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.1 per unit of volatility. If you would invest 2,655 in United Natural Foods on October 16, 2024 and sell it today you would earn a total of 96.00 from holding United Natural Foods or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. United Natural Foods
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| United Natural Foods |
SWISS WATER and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and United Natural
The main advantage of trading using opposite SWISS WATER and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER position performs unexpectedly, United Natural can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in United Natural will offset losses from the drop in United Natural's long position.| SWISS WATER vs. Cleanaway Waste Management | SWISS WATER vs. Jupiter Fund Management | SWISS WATER vs. Gladstone Investment | SWISS WATER vs. Apollo Investment Corp |
| United Natural vs. CyberArk Software | United Natural vs. MAGIC SOFTWARE ENTR | United Natural vs. Easy Software AG | United Natural vs. SWISS WATER DECAFFCOFFEE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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