Correlation Between United Natural and Food Life
Can any of the company-specific risk be diversified away by investing in both United Natural and Food Life 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 Food Life 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 Food Life Companies, you can compare the effects of market volatilities on United Natural and Food Life 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 Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Food Life.
Diversification Opportunities for United Natural and Food Life
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Food is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies 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 Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of United Natural i.e., United Natural and Food Life go up and down completely randomly.
Pair Corralation between United Natural and Food Life
Assuming the 90 days horizon United Natural Foods is expected to generate 1.29 times more return on investment than Food Life. However, United Natural is 1.29 times more volatile than Food Life Companies. It trades about 0.36 of its potential returns per unit of risk. Food Life Companies is currently generating about 0.23 per unit of risk. If you would invest 1,820 in United Natural Foods on August 28, 2024 and sell it today you would earn a total of 390.00 from holding United Natural Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
United Natural Foods vs. Food Life Companies
Performance |
| Timeline |
| United Natural Foods |
| Food Life Companies |
United Natural and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Food Life
The main advantage of trading using opposite United Natural and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
| Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings | Food Life vs. Origin Agritech | Food Life vs. SIVERS SEMICONDUCTORS AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings 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 | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |