Correlation Between United Natural and Cogobuy
Can any of the company-specific risk be diversified away by investing in both United Natural and Cogobuy 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 Cogobuy 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 Cogobuy Group, you can compare the effects of market volatilities on United Natural and Cogobuy 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 Cogobuy. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Cogobuy.
Diversification Opportunities for United Natural and Cogobuy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Cogobuy is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Cogobuy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogobuy Group 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 Cogobuy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogobuy Group has no effect on the direction of United Natural i.e., United Natural and Cogobuy go up and down completely randomly.
Pair Corralation between United Natural and Cogobuy
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Cogobuy. But the stock apears to be less risky and, when comparing its historical volatility, United Natural Foods is 1.55 times less risky than Cogobuy. The stock trades about 0.0 of its potential returns per unit of risk. The Cogobuy Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Cogobuy Group on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Cogobuy Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Cogobuy Group
Performance |
| Timeline |
| United Natural Foods |
| Cogobuy Group |
United Natural and Cogobuy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Cogobuy
The main advantage of trading using opposite United Natural and Cogobuy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Cogobuy 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 Cogobuy will offset losses from the drop in Cogobuy's long position.| United Natural vs. STRAYER EDUCATION | United Natural vs. PSI Software AG | United Natural vs. Strategic Education | United Natural vs. ATOSS SOFTWARE |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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