Correlation Between United Natural and W P
Can any of the company-specific risk be diversified away by investing in both United Natural and W P 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 W P 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 W P Carey, you can compare the effects of market volatilities on United Natural and W P 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 W P. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and W P.
Diversification Opportunities for United Natural and W P
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and WPY is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and W P Carey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W P Carey 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 W P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W P Carey has no effect on the direction of United Natural i.e., United Natural and W P go up and down completely randomly.
Pair Corralation between United Natural and W P
Assuming the 90 days horizon United Natural Foods is expected to generate 5.13 times more return on investment than W P. However, United Natural is 5.13 times more volatile than W P Carey. It trades about 0.2 of its potential returns per unit of risk. W P Carey is currently generating about 0.06 per unit of risk. If you would invest 1,262 in United Natural Foods on August 28, 2024 and sell it today you would earn a total of 948.00 from holding United Natural Foods or generate 75.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. W P Carey
Performance |
| Timeline |
| United Natural Foods |
| W P Carey |
United Natural and W P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and W P
The main advantage of trading using opposite United Natural and W P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, W P 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 W P will offset losses from the drop in W P's long position.| United Natural vs. Lion One Metals | United Natural vs. LION ONE METALS | United Natural vs. GREENX METALS LTD | United Natural vs. Harmony Gold Mining |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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