Correlation Between United Natural and ITALIAN WINE
Can any of the company-specific risk be diversified away by investing in both United Natural and ITALIAN WINE 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 ITALIAN WINE 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 ITALIAN WINE BRANDS, you can compare the effects of market volatilities on United Natural and ITALIAN WINE 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 ITALIAN WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and ITALIAN WINE.
Diversification Opportunities for United Natural and ITALIAN WINE
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and ITALIAN is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and ITALIAN WINE BRANDS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITALIAN WINE BRANDS 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 ITALIAN WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITALIAN WINE BRANDS has no effect on the direction of United Natural i.e., United Natural and ITALIAN WINE go up and down completely randomly.
Pair Corralation between United Natural and ITALIAN WINE
Assuming the 90 days horizon United Natural Foods is expected to generate 1.59 times more return on investment than ITALIAN WINE. However, United Natural is 1.59 times more volatile than ITALIAN WINE BRANDS. It trades about 0.36 of its potential returns per unit of risk. ITALIAN WINE BRANDS is currently generating about 0.1 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. ITALIAN WINE BRANDS
Performance |
| Timeline |
| United Natural Foods |
| ITALIAN WINE BRANDS |
United Natural and ITALIAN WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and ITALIAN WINE
The main advantage of trading using opposite United Natural and ITALIAN WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, ITALIAN WINE 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 ITALIAN WINE will offset losses from the drop in ITALIAN WINE's long position.| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
| ITALIAN WINE vs. Merit Medical Systems | ITALIAN WINE vs. GOODYEAR T RUBBER | ITALIAN WINE vs. SCANDMEDICAL SOLDK 040 | ITALIAN WINE vs. Apollo Medical Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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