Correlation Between Highlight Communications and United Natural
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and United Natural Foods, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and United Natural.
Diversification Opportunities for Highlight Communications and United Natural
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highlight and United is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG 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 Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and United Natural go up and down completely randomly.
Pair Corralation between Highlight Communications and United Natural
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 2.61 times more return on investment than United Natural. However, Highlight Communications is 2.61 times more volatile than United Natural Foods. It trades about 0.25 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.19 per unit of risk. If you would invest 114.00 in Highlight Communications AG on October 30, 2024 and sell it today you would earn a total of 35.00 from holding Highlight Communications AG or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. United Natural Foods
Performance |
| Timeline |
| Highlight Communications |
| United Natural Foods |
Highlight Communications and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and United Natural
The main advantage of trading using opposite Highlight Communications and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. Keck Seng Investments | Highlight Communications vs. Gladstone Investment | Highlight Communications vs. CENTURIA OFFICE REIT | Highlight Communications vs. NURAN WIRELESS INC |
| United Natural vs. FIRST SAVINGS FINL | United Natural vs. SCANSOURCE | United Natural vs. ScanSource | United Natural vs. Japan Asia Investment |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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