Correlation Between United Natural and Media
Can any of the company-specific risk be diversified away by investing in both United Natural and Media 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 Media 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 Media and Games, you can compare the effects of market volatilities on United Natural and Media 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 Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Media.
Diversification Opportunities for United Natural and Media
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Media is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games 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 Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of United Natural i.e., United Natural and Media go up and down completely randomly.
Pair Corralation between United Natural and Media
Assuming the 90 days horizon United Natural Foods is expected to generate 0.62 times more return on investment than Media. However, United Natural Foods is 1.61 times less risky than Media. It trades about 0.05 of its potential returns per unit of risk. Media and Games is currently generating about -0.11 per unit of risk. If you would invest 2,624 in United Natural Foods on October 19, 2024 and sell it today you would earn a total of 42.00 from holding United Natural Foods or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
United Natural Foods vs. Media and Games
Performance |
| Timeline |
| United Natural Foods |
| Media and Games |
United Natural and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Media
The main advantage of trading using opposite United Natural and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| United Natural vs. Chuangs China Investments | United Natural vs. SLR Investment Corp | United Natural vs. MOLSON RS BEVERAGE | United Natural vs. Lery Seafood Group |
| Media vs. MOLSON RS BEVERAGE | Media vs. United Natural Foods | Media vs. BROADWIND ENRGY | Media vs. Performance Food Group |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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