Correlation Between United Natural and APPLIED MATERIALS
Can any of the company-specific risk be diversified away by investing in both United Natural and APPLIED MATERIALS 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 APPLIED MATERIALS 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 APPLIED MATERIALS, you can compare the effects of market volatilities on United Natural and APPLIED MATERIALS 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 APPLIED MATERIALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and APPLIED MATERIALS.
Diversification Opportunities for United Natural and APPLIED MATERIALS
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and APPLIED is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and APPLIED MATERIALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLIED MATERIALS 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 APPLIED MATERIALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLIED MATERIALS has no effect on the direction of United Natural i.e., United Natural and APPLIED MATERIALS go up and down completely randomly.
Pair Corralation between United Natural and APPLIED MATERIALS
Assuming the 90 days horizon United Natural Foods is expected to generate 1.49 times more return on investment than APPLIED MATERIALS. However, United Natural is 1.49 times more volatile than APPLIED MATERIALS. It trades about 0.17 of its potential returns per unit of risk. APPLIED MATERIALS is currently generating about -0.02 per unit of risk. If you would invest 871.00 in United Natural Foods on September 3, 2024 and sell it today you would earn a total of 1,419 from holding United Natural Foods or generate 162.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. APPLIED MATERIALS
Performance |
| Timeline |
| United Natural Foods |
| APPLIED MATERIALS |
United Natural and APPLIED MATERIALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and APPLIED MATERIALS
The main advantage of trading using opposite United Natural and APPLIED MATERIALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, APPLIED MATERIALS 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 APPLIED MATERIALS will offset losses from the drop in APPLIED MATERIALS's long position.| United Natural vs. Performance Food Group | United Natural vs. Superior Plus Corp | United Natural vs. NMI Holdings | United Natural vs. Origin Agritech |
| APPLIED MATERIALS vs. BJs Wholesale Club | APPLIED MATERIALS vs. United Internet AG | APPLIED MATERIALS vs. Entravision Communications | APPLIED MATERIALS vs. Cogent Communications Holdings |
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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