Correlation Between Commercial Vehicle and United Natural
Can any of the company-specific risk be diversified away by investing in both Commercial Vehicle 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 Commercial Vehicle and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commercial Vehicle Group and United Natural Foods, you can compare the effects of market volatilities on Commercial Vehicle 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 Commercial Vehicle with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commercial Vehicle and United Natural.
Diversification Opportunities for Commercial Vehicle and United Natural
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Commercial and United is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Commercial Vehicle Group 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 Commercial Vehicle 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 Commercial Vehicle Group 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 Commercial Vehicle i.e., Commercial Vehicle and United Natural go up and down completely randomly.
Pair Corralation between Commercial Vehicle and United Natural
Assuming the 90 days trading horizon Commercial Vehicle Group is expected to under-perform the United Natural. But the stock apears to be less risky and, when comparing its historical volatility, Commercial Vehicle Group is 1.27 times less risky than United Natural. The stock trades about -0.07 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 3,814 in United Natural Foods on November 19, 2024 and sell it today you would lose (598.00) from holding United Natural Foods or give up 15.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commercial Vehicle Group vs. United Natural Foods
Performance |
| Timeline |
| Commercial Vehicle |
| United Natural Foods |
Commercial Vehicle and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commercial Vehicle and United Natural
The main advantage of trading using opposite Commercial Vehicle and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commercial Vehicle 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.| Commercial Vehicle vs. Lendlease Group | Commercial Vehicle vs. FRACTAL GAMING GROUP | Commercial Vehicle vs. Global Ship Lease | Commercial Vehicle vs. Corsair Gaming |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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