Correlation Between United Natural and DXC Technology
Can any of the company-specific risk be diversified away by investing in both United Natural and DXC Technology 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 United Natural and DXC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods, and DXC Technology, you can compare the effects of market volatilities on United Natural and DXC Technology 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 United Natural with a short position of DXC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and DXC Technology.
Diversification Opportunities for United Natural and DXC Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and DXC is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods, and DXC Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DXC Technology and United Natural 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 United Natural Foods, are associated (or correlated) with DXC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DXC Technology has no effect on the direction of United Natural i.e., United Natural and DXC Technology go up and down completely randomly.
Pair Corralation between United Natural and DXC Technology
Assuming the 90 days trading horizon United Natural Foods, is expected to generate 1.35 times more return on investment than DXC Technology. However, United Natural is 1.35 times more volatile than DXC Technology. It trades about 0.0 of its potential returns per unit of risk. DXC Technology is currently generating about -0.22 per unit of risk. If you would invest 4,200 in United Natural Foods, on November 6, 2024 and sell it today you would lose (20.00) from holding United Natural Foods, or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods, vs. DXC Technology
Performance |
| Timeline |
| United Natural Foods, |
| DXC Technology |
United Natural and DXC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and DXC Technology
The main advantage of trading using opposite United Natural and DXC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, DXC Technology 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 DXC Technology will offset losses from the drop in DXC Technology's long position.| United Natural vs. Marfrig Global Foods | United Natural vs. CM Hospitalar SA | United Natural vs. Elevance Health, | United Natural vs. PENN Entertainment, |
| DXC Technology vs. Charter Communications | DXC Technology vs. Metalrgica Riosulense SA | DXC Technology vs. United States Steel | DXC Technology vs. Melco Resorts 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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