Correlation Between United Natural and KWS SAAT
Can any of the company-specific risk be diversified away by investing in both United Natural and KWS SAAT 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 KWS SAAT 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 KWS SAAT SE, you can compare the effects of market volatilities on United Natural and KWS SAAT 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 KWS SAAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and KWS SAAT.
Diversification Opportunities for United Natural and KWS SAAT
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and KWS is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and KWS SAAT SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KWS SAAT SE 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 KWS SAAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KWS SAAT SE has no effect on the direction of United Natural i.e., United Natural and KWS SAAT go up and down completely randomly.
Pair Corralation between United Natural and KWS SAAT
Assuming the 90 days horizon United Natural Foods is expected to under-perform the KWS SAAT. In addition to that, United Natural is 2.49 times more volatile than KWS SAAT SE. It trades about -0.02 of its total potential returns per unit of risk. KWS SAAT SE is currently generating about 0.0 per unit of volatility. If you would invest 6,418 in KWS SAAT SE on August 24, 2024 and sell it today you would lose (458.00) from holding KWS SAAT SE or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. KWS SAAT SE
Performance |
| Timeline |
| United Natural Foods |
| KWS SAAT SE |
United Natural and KWS SAAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and KWS SAAT
The main advantage of trading using opposite United Natural and KWS SAAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, KWS SAAT 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 KWS SAAT will offset losses from the drop in KWS SAAT's long position.| United Natural vs. AEON STORES | United Natural vs. National Retail Properties | United Natural vs. CosmoSteel Holdings Limited | United Natural vs. Insteel Industries |
| KWS SAAT vs. GALENA MINING LTD | KWS SAAT vs. Spirent Communications plc | KWS SAAT vs. Perseus Mining Limited | KWS SAAT vs. ETFS Coffee ETC |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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