Correlation Between United Natural and Kroger
Can any of the company-specific risk be diversified away by investing in both United Natural and Kroger 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 Kroger 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 The Kroger Co, you can compare the effects of market volatilities on United Natural and Kroger 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 Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Kroger.
Diversification Opportunities for United Natural and Kroger
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Kroger is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and The Kroger Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Kroger 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 Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Kroger has no effect on the direction of United Natural i.e., United Natural and Kroger go up and down completely randomly.
Pair Corralation between United Natural and Kroger
Assuming the 90 days horizon United Natural Foods is expected to generate 1.15 times more return on investment than Kroger. However, United Natural is 1.15 times more volatile than The Kroger Co. It trades about 0.36 of its potential returns per unit of risk. The Kroger Co is currently generating about 0.17 per unit of risk. If you would invest 1,820 in United Natural Foods on August 29, 2024 and sell it today you would earn a total of 390.00 from holding United Natural Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
United Natural Foods vs. The Kroger Co
Performance |
| Timeline |
| United Natural Foods |
| The Kroger |
United Natural and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Kroger
The main advantage of trading using opposite United Natural and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| United Natural vs. Superior Plus Corp | United Natural vs. SIVERS SEMICONDUCTORS AB | United Natural vs. Talanx AG | United Natural vs. 2G ENERGY |
| Kroger vs. TESCO PLC LS 0633333 | Kroger vs. Superior Plus Corp | Kroger vs. NMI Holdings | Kroger vs. SIVERS SEMICONDUCTORS AB |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges |