Correlation Between United Natural and MOLSON RS
Can any of the company-specific risk be diversified away by investing in both United Natural and MOLSON RS 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 MOLSON RS 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 MOLSON RS BEVERAGE, you can compare the effects of market volatilities on United Natural and MOLSON RS 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 MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and MOLSON RS.
Diversification Opportunities for United Natural and MOLSON RS
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between United and MOLSON is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of United Natural i.e., United Natural and MOLSON RS go up and down completely randomly.
Pair Corralation between United Natural and MOLSON RS
Assuming the 90 days horizon United Natural Foods is expected to generate 1.85 times more return on investment than MOLSON RS. However, United Natural is 1.85 times more volatile than MOLSON RS BEVERAGE. It trades about 0.03 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.38 per unit of risk. If you would invest 2,565 in United Natural Foods on October 26, 2024 and sell it today you would earn a total of 17.00 from holding United Natural Foods or generate 0.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
United Natural Foods vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| United Natural Foods |
| MOLSON RS BEVERAGE |
United Natural and MOLSON RS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and MOLSON RS
The main advantage of trading using opposite United Natural and MOLSON RS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, MOLSON RS 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 MOLSON RS will offset losses from the drop in MOLSON RS's long position.| United Natural vs. Global Ship Lease | United Natural vs. Webster Financial | United Natural vs. Ameriprise Financial | United Natural vs. CENTURIA OFFICE REIT |
| MOLSON RS vs. Stag Industrial | MOLSON RS vs. Perseus Mining Limited | MOLSON RS vs. Forsys Metals Corp | MOLSON RS vs. Zijin Mining 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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