Correlation Between United Natural and Postal Savings
Can any of the company-specific risk be diversified away by investing in both United Natural and Postal Savings 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 Postal Savings 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 Postal Savings Bank, you can compare the effects of market volatilities on United Natural and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Postal Savings.
Diversification Opportunities for United Natural and Postal Savings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Postal is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of United Natural i.e., United Natural and Postal Savings go up and down completely randomly.
Pair Corralation between United Natural and Postal Savings
Assuming the 90 days horizon United Natural Foods is expected to generate 1.53 times more return on investment than Postal Savings. However, United Natural is 1.53 times more volatile than Postal Savings Bank. It trades about 0.34 of its potential returns per unit of risk. Postal Savings Bank is currently generating about 0.06 per unit of risk. If you would invest 1,888 in United Natural Foods on September 1, 2024 and sell it today you would earn a total of 402.00 from holding United Natural Foods or generate 21.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Natural Foods vs. Postal Savings Bank
Performance |
| Timeline |
| United Natural Foods |
| Postal Savings Bank |
United Natural and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Postal Savings
The main advantage of trading using opposite United Natural and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| United Natural vs. Sysco | United Natural vs. Jernimo Martins SGPS | United Natural vs. Bunzl plc | United Natural vs. Performance Food Group |
| Postal Savings vs. PLAYTIKA HOLDING DL 01 | Postal Savings vs. INDOFOOD AGRI RES | Postal Savings vs. JJ SNACK FOODS | Postal Savings vs. KOOL2PLAY SA ZY |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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