Correlation Between FIRST SAVINGS and United Natural
Can any of the company-specific risk be diversified away by investing in both FIRST SAVINGS 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 FIRST SAVINGS and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SAVINGS FINL and United Natural Foods, you can compare the effects of market volatilities on FIRST SAVINGS 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 FIRST SAVINGS with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SAVINGS and United Natural.
Diversification Opportunities for FIRST SAVINGS and United Natural
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FIRST and United is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SAVINGS FINL 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 FIRST SAVINGS 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 FIRST SAVINGS FINL 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 FIRST SAVINGS i.e., FIRST SAVINGS and United Natural go up and down completely randomly.
Pair Corralation between FIRST SAVINGS and United Natural
Assuming the 90 days horizon FIRST SAVINGS FINL is expected to generate 0.54 times more return on investment than United Natural. However, FIRST SAVINGS FINL is 1.86 times less risky than United Natural. It trades about 0.04 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.0 per unit of risk. If you would invest 1,650 in FIRST SAVINGS FINL on October 31, 2024 and sell it today you would earn a total of 530.00 from holding FIRST SAVINGS FINL or generate 32.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
FIRST SAVINGS FINL vs. United Natural Foods
Performance |
Timeline |
FIRST SAVINGS FINL |
United Natural Foods |
FIRST SAVINGS and United Natural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FIRST SAVINGS and United Natural
The main advantage of trading using opposite FIRST SAVINGS and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SAVINGS 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.FIRST SAVINGS vs. Hisense Home Appliances | FIRST SAVINGS vs. Autohome ADR | FIRST SAVINGS vs. LG Electronics | FIRST SAVINGS vs. STMICROELECTRONICS |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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