Correlation Between United Natural and Kemper
Can any of the company-specific risk be diversified away by investing in both United Natural and Kemper 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 Kemper 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 Kemper, you can compare the effects of market volatilities on United Natural and Kemper 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 Kemper. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Kemper.
Diversification Opportunities for United Natural and Kemper
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Kemper is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Kemper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kemper 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 Kemper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kemper has no effect on the direction of United Natural i.e., United Natural and Kemper go up and down completely randomly.
Pair Corralation between United Natural and Kemper
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Kemper. In addition to that, United Natural is 1.72 times more volatile than Kemper. It trades about -0.01 of its total potential returns per unit of risk. Kemper is currently generating about 0.04 per unit of volatility. If you would invest 4,853 in Kemper on September 3, 2024 and sell it today you would earn a total of 1,847 from holding Kemper or generate 38.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Kemper
Performance |
| Timeline |
| United Natural Foods |
| Kemper |
United Natural and Kemper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Kemper
The main advantage of trading using opposite United Natural and Kemper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Kemper 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 Kemper will offset losses from the drop in Kemper'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 |
| Kemper vs. The Peoples Insurance | Kemper vs. Loews Corp | Kemper vs. The Hanover Insurance | Kemper vs. Superior Plus Corp |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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