Correlation Between United Natural and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both United Natural and CNH Industrial 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 CNH Industrial 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 CNH Industrial NV, you can compare the effects of market volatilities on United Natural and CNH Industrial 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 CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and CNH Industrial.
Diversification Opportunities for United Natural and CNH Industrial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and CNH is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV 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 CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of United Natural i.e., United Natural and CNH Industrial go up and down completely randomly.
Pair Corralation between United Natural and CNH Industrial
Assuming the 90 days horizon United Natural Foods is expected to under-perform the CNH Industrial. In addition to that, United Natural is 1.88 times more volatile than CNH Industrial NV. It trades about 0.0 of its total potential returns per unit of risk. CNH Industrial NV is currently generating about -0.01 per unit of volatility. If you would invest 1,420 in CNH Industrial NV on September 1, 2024 and sell it today you would lose (233.00) from holding CNH Industrial NV or give up 16.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Natural Foods vs. CNH Industrial NV
Performance |
| Timeline |
| United Natural Foods |
| CNH Industrial NV |
United Natural and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and CNH Industrial
The main advantage of trading using opposite United Natural and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| United Natural vs. Sysco | United Natural vs. Jernimo Martins SGPS | United Natural vs. Performance Food Group | United Natural vs. US Foods Holding |
| CNH Industrial vs. JJ SNACK FOODS | CNH Industrial vs. EMBARK EDUCATION LTD | CNH Industrial vs. United Natural Foods | CNH Industrial vs. CN MODERN DAIRY |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |