Correlation Between Hf Foods and United Natural
Can any of the company-specific risk be diversified away by investing in both Hf Foods 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 Hf Foods and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hf Foods Group and United Natural Foods, you can compare the effects of market volatilities on Hf Foods 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 Hf Foods with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hf Foods and United Natural.
Diversification Opportunities for Hf Foods and United Natural
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HFFG and United is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hf Foods 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 Hf Foods 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 Hf Foods 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 Hf Foods i.e., Hf Foods and United Natural go up and down completely randomly.
Pair Corralation between Hf Foods and United Natural
Given the investment horizon of 90 days Hf Foods is expected to generate 28.82 times less return on investment than United Natural. But when comparing it to its historical volatility, Hf Foods Group is 1.45 times less risky than United Natural. It trades about 0.02 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 2,087 in United Natural Foods on August 27, 2024 and sell it today you would earn a total of 408.00 from holding United Natural Foods or generate 19.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hf Foods Group vs. United Natural Foods
Performance |
| Timeline |
| Hf Foods Group |
| United Natural Foods |
Hf Foods and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hf Foods and United Natural
The main advantage of trading using opposite Hf Foods and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hf Foods 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.| Hf Foods vs. Innovative Food Hldg | Hf Foods vs. Calavo Growers | Hf Foods vs. The Chefs Warehouse | Hf Foods vs. AMCON Distributing |
| United Natural vs. Innovative Food Hldg | United Natural vs. Calavo Growers | United Natural vs. The Chefs Warehouse | United Natural vs. AMCON Distributing |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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