Correlation Between PATTIES FOODS and United Natural
Can any of the company-specific risk be diversified away by investing in both PATTIES 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 PATTIES 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 PATTIES FOODS and United Natural Foods, you can compare the effects of market volatilities on PATTIES 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 PATTIES FOODS with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of PATTIES FOODS and United Natural.
Diversification Opportunities for PATTIES FOODS and United Natural
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between PATTIES and United is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding PATTIES FOODS 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 PATTIES 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 PATTIES FOODS 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 PATTIES FOODS i.e., PATTIES FOODS and United Natural go up and down completely randomly.
Pair Corralation between PATTIES FOODS and United Natural
Assuming the 90 days horizon PATTIES FOODS is expected to under-perform the United Natural. In addition to that, PATTIES FOODS is 1.12 times more volatile than United Natural Foods. It trades about -0.05 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.12 per unit of volatility. If you would invest 2,715 in United Natural Foods on November 7, 2024 and sell it today you would earn a total of 162.00 from holding United Natural Foods or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
PATTIES FOODS vs. United Natural Foods
Performance |
| Timeline |
| PATTIES FOODS |
| United Natural Foods |
PATTIES FOODS and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PATTIES FOODS and United Natural
The main advantage of trading using opposite PATTIES FOODS and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PATTIES 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.| PATTIES FOODS vs. Perseus Mining Limited | PATTIES FOODS vs. STGEORGE MINING LTD | PATTIES FOODS vs. PennyMac Mortgage Investment | PATTIES FOODS vs. MCEWEN MINING INC |
| United Natural vs. Tencent Music Entertainment | United Natural vs. PENN Entertainment | United Natural vs. ZINC MEDIA GR | United Natural vs. Universal Entertainment |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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