Correlation Between United Natural and Erste Group
Can any of the company-specific risk be diversified away by investing in both United Natural and Erste Group 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 Erste Group 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 Erste Group Bank, you can compare the effects of market volatilities on United Natural and Erste Group 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 Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Erste Group.
Diversification Opportunities for United Natural and Erste Group
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Erste is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank 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 Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of United Natural i.e., United Natural and Erste Group go up and down completely randomly.
Pair Corralation between United Natural and Erste Group
Assuming the 90 days horizon United Natural Foods is expected to generate 1.8 times more return on investment than Erste Group. However, United Natural is 1.8 times more volatile than Erste Group Bank. It trades about 0.12 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.06 per unit of risk. If you would invest 2,715 in United Natural Foods on November 7, 2024 and sell it today you would earn a total of 162.00 from holding United Natural Foods or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Erste Group Bank
Performance |
| Timeline |
| United Natural Foods |
| Erste Group Bank |
United Natural and Erste Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Erste Group
The main advantage of trading using opposite United Natural and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.| United Natural vs. Tencent Music Entertainment | United Natural vs. PENN Entertainment | United Natural vs. ZINC MEDIA GR | United Natural vs. Universal Entertainment |
| Erste Group vs. GREENX METALS LTD | Erste Group vs. MAGNUM MINING EXP | Erste Group vs. KENEDIX OFFICE INV | Erste Group vs. INVITATION HOMES DL |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |