Correlation Between United Natural and Laureate Education
Can any of the company-specific risk be diversified away by investing in both United Natural and Laureate Education 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 Laureate Education 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 Laureate Education, you can compare the effects of market volatilities on United Natural and Laureate Education 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 Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Laureate Education.
Diversification Opportunities for United Natural and Laureate Education
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Laureate is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate Education 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of United Natural i.e., United Natural and Laureate Education go up and down completely randomly.
Pair Corralation between United Natural and Laureate Education
Assuming the 90 days horizon United Natural Foods is expected to generate 1.72 times more return on investment than Laureate Education. However, United Natural is 1.72 times more volatile than Laureate Education. It trades about 0.06 of its potential returns per unit of risk. Laureate Education is currently generating about 0.07 per unit of risk. If you would invest 1,402 in United Natural Foods on September 4, 2024 and sell it today you would earn a total of 888.00 from holding United Natural Foods or generate 63.34% 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. Laureate Education
Performance |
| Timeline |
| United Natural Foods |
| Laureate Education |
United Natural and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Laureate Education
The main advantage of trading using opposite United Natural and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Laureate Education 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 Laureate Education will offset losses from the drop in Laureate Education's long position.| United Natural vs. Performance Food Group | United Natural vs. Superior Plus Corp | United Natural vs. NMI Holdings | United Natural vs. Origin Agritech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |