Correlation Between Apple and United Natural
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and United Natural Foods,, you can compare the effects of market volatilities on Apple 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 Apple with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and United Natural.
Diversification Opportunities for Apple and United Natural
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Apple and United is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc 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 Apple 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 Apple Inc 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 Apple i.e., Apple and United Natural go up and down completely randomly.
Pair Corralation between Apple and United Natural
Assuming the 90 days trading horizon Apple Inc is expected to generate 1.03 times more return on investment than United Natural. However, Apple is 1.03 times more volatile than United Natural Foods,. It trades about -0.13 of its potential returns per unit of risk. United Natural Foods, is currently generating about -0.14 per unit of risk. If you would invest 7,515 in Apple Inc on October 14, 2024 and sell it today you would lose (313.00) from holding Apple Inc or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. United Natural Foods,
Performance |
| Timeline |
| Apple Inc |
| United Natural Foods, |
Apple and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and United Natural
The main advantage of trading using opposite Apple and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. Patria Investments Limited | Apple vs. Ares Management | Apple vs. Zoom Video Communications | Apple vs. Bemobi Mobile Tech |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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