Correlation Between United Natural and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both United Natural and EBRO FOODS 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 EBRO FOODS 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 EBRO FOODS, you can compare the effects of market volatilities on United Natural and EBRO FOODS 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 EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and EBRO FOODS.
Diversification Opportunities for United Natural and EBRO FOODS
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and EBRO is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS 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 EBRO FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EBRO FOODS has no effect on the direction of United Natural i.e., United Natural and EBRO FOODS go up and down completely randomly.
Pair Corralation between United Natural and EBRO FOODS
Assuming the 90 days horizon United Natural is expected to generate 1.98 times less return on investment than EBRO FOODS. In addition to that, United Natural is 2.72 times more volatile than EBRO FOODS. It trades about 0.0 of its total potential returns per unit of risk. EBRO FOODS is currently generating about 0.02 per unit of volatility. If you would invest 1,431 in EBRO FOODS on October 19, 2024 and sell it today you would earn a total of 145.00 from holding EBRO FOODS or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. EBRO FOODS
Performance |
| Timeline |
| United Natural Foods |
| EBRO FOODS |
United Natural and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and EBRO FOODS
The main advantage of trading using opposite United Natural and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, EBRO FOODS 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 EBRO FOODS will offset losses from the drop in EBRO FOODS's long position.| United Natural vs. Chuangs China Investments | United Natural vs. SLR Investment Corp | United Natural vs. MOLSON RS BEVERAGE | United Natural vs. Lery Seafood Group |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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