Correlation Between United Natural and CAL-MAINE FOODS
Can any of the company-specific risk be diversified away by investing in both United Natural and CAL-MAINE 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 CAL-MAINE 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 CAL MAINE FOODS, you can compare the effects of market volatilities on United Natural and CAL-MAINE 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 CAL-MAINE FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and CAL-MAINE FOODS.
Diversification Opportunities for United Natural and CAL-MAINE FOODS
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between United and CAL-MAINE is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and CAL MAINE FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAL MAINE 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 CAL-MAINE FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAL MAINE FOODS has no effect on the direction of United Natural i.e., United Natural and CAL-MAINE FOODS go up and down completely randomly.
Pair Corralation between United Natural and CAL-MAINE FOODS
Assuming the 90 days horizon United Natural Foods is expected to under-perform the CAL-MAINE FOODS. In addition to that, United Natural is 1.93 times more volatile than CAL MAINE FOODS. It trades about 0.0 of its total potential returns per unit of risk. CAL MAINE FOODS is currently generating about 0.08 per unit of volatility. If you would invest 4,449 in CAL MAINE FOODS on August 31, 2024 and sell it today you would earn a total of 4,703 from holding CAL MAINE FOODS or generate 105.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. CAL MAINE FOODS
Performance |
| Timeline |
| United Natural Foods |
| CAL MAINE FOODS |
United Natural and CAL-MAINE FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and CAL-MAINE FOODS
The main advantage of trading using opposite United Natural and CAL-MAINE FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, CAL-MAINE 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 CAL-MAINE FOODS will offset losses from the drop in CAL-MAINE FOODS's long position.| United Natural vs. Charter Communications | United Natural vs. Perseus Mining Limited | United Natural vs. Jacquet Metal Service | United Natural vs. SBA Communications Corp |
| CAL-MAINE FOODS vs. Verizon Communications | CAL-MAINE FOODS vs. Spirent Communications plc | CAL-MAINE FOODS vs. WillScot Mobile Mini | CAL-MAINE FOODS vs. Calibre Mining Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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