Correlation Between United Natural and Hf Foods

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Can any of the company-specific risk be diversified away by investing in both United Natural and Hf Foods 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 Hf Foods 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 Hf Foods Group, you can compare the effects of market volatilities on United Natural and Hf Foods 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 Hf Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Hf Foods.

Diversification Opportunities for United Natural and Hf Foods

UnitedHFFGDiversified AwayUnitedHFFGDiversified Away100%
-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between United and HFFG is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Hf Foods Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hf Foods Group 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 Hf Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hf Foods Group has no effect on the direction of United Natural i.e., United Natural and Hf Foods go up and down completely randomly.

Pair Corralation between United Natural and Hf Foods

Given the investment horizon of 90 days United Natural Foods is expected to generate 1.1 times more return on investment than Hf Foods. However, United Natural is 1.1 times more volatile than Hf Foods Group. It trades about 0.01 of its potential returns per unit of risk. Hf Foods Group is currently generating about -0.02 per unit of risk. If you would invest  4,096  in United Natural Foods on November 26, 2024 and sell it today you would lose (958.00) from holding United Natural Foods or give up 23.39% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

United Natural Foods  vs.  Hf Foods Group

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -200204060
JavaScript chart by amCharts 3.21.15UNFI HFFG
       Timeline  
United Natural Foods 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, United Natural demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb242628303234
Hf Foods Group 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hf Foods Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb22.533.54

United Natural and Hf Foods Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-10.66-7.99-5.31-2.63-0.04462.795.738.6711.614.54 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15UNFI HFFG
       Returns  

Pair Trading with United Natural and Hf Foods

The main advantage of trading using opposite United Natural and Hf Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Hf Foods 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 Hf Foods will offset losses from the drop in Hf Foods' long position.
The idea behind United Natural Foods and Hf Foods Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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