Correlation Between United Natural and Kilroy Realty
Can any of the company-specific risk be diversified away by investing in both United Natural and Kilroy Realty 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 Kilroy Realty 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 Kilroy Realty Corp, you can compare the effects of market volatilities on United Natural and Kilroy Realty 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 Kilroy Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Kilroy Realty.
Diversification Opportunities for United Natural and Kilroy Realty
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Kilroy is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Kilroy Realty Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilroy Realty Corp 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 Kilroy Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilroy Realty Corp has no effect on the direction of United Natural i.e., United Natural and Kilroy Realty go up and down completely randomly.
Pair Corralation between United Natural and Kilroy Realty
Assuming the 90 days horizon United Natural Foods is expected to generate 2.9 times more return on investment than Kilroy Realty. However, United Natural is 2.9 times more volatile than Kilroy Realty Corp. It trades about 0.2 of its potential returns per unit of risk. Kilroy Realty Corp is currently generating about 0.19 per unit of risk. If you would invest 1,468 in United Natural Foods on August 29, 2024 and sell it today you would earn a total of 742.00 from holding United Natural Foods or generate 50.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Kilroy Realty Corp
Performance |
| Timeline |
| United Natural Foods |
| Kilroy Realty Corp |
United Natural and Kilroy Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Kilroy Realty
The main advantage of trading using opposite United Natural and Kilroy Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Kilroy Realty 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 Kilroy Realty will offset losses from the drop in Kilroy Realty'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 |
| Kilroy Realty vs. ARDAGH METAL PACDL 0001 | Kilroy Realty vs. PKSHA TECHNOLOGY INC | Kilroy Realty vs. Jacquet Metal Service | Kilroy Realty vs. Axcelis Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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