Correlation Between United Natural and Airbus SE
Can any of the company-specific risk be diversified away by investing in both United Natural and Airbus SE 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 Airbus SE 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 Airbus SE, you can compare the effects of market volatilities on United Natural and Airbus SE 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 Airbus SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Airbus SE.
Diversification Opportunities for United Natural and Airbus SE
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Airbus is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Airbus SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbus SE 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 Airbus SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbus SE has no effect on the direction of United Natural i.e., United Natural and Airbus SE go up and down completely randomly.
Pair Corralation between United Natural and Airbus SE
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Airbus SE. In addition to that, United Natural is 2.73 times more volatile than Airbus SE. It trades about 0.0 of its total potential returns per unit of risk. Airbus SE is currently generating about 0.06 per unit of volatility. If you would invest 10,827 in Airbus SE on September 5, 2024 and sell it today you would earn a total of 4,339 from holding Airbus SE or generate 40.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
United Natural Foods vs. Airbus SE
Performance |
| Timeline |
| United Natural Foods |
| Airbus SE |
United Natural and Airbus SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Airbus SE
The main advantage of trading using opposite United Natural and Airbus SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Airbus SE 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 Airbus SE will offset losses from the drop in Airbus SE's long position.| United Natural vs. Compagnie Plastic Omnium | United Natural vs. Datang International Power | United Natural vs. DOCDATA | United Natural vs. Sumitomo Rubber Industries |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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