Correlation Between United Natural and Mamas Creations
Can any of the company-specific risk be diversified away by investing in both United Natural and Mamas Creations 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 Mamas Creations 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 Mamas Creations, you can compare the effects of market volatilities on United Natural and Mamas Creations 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 Mamas Creations. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Mamas Creations.
Diversification Opportunities for United Natural and Mamas Creations
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Mamas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Mamas Creations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mamas Creations 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 Mamas Creations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mamas Creations has no effect on the direction of United Natural i.e., United Natural and Mamas Creations go up and down completely randomly.
Pair Corralation between United Natural and Mamas Creations
Given the investment horizon of 90 days United Natural Foods is expected to generate 0.67 times more return on investment than Mamas Creations. However, United Natural Foods is 1.48 times less risky than Mamas Creations. It trades about 0.16 of its potential returns per unit of risk. Mamas Creations is currently generating about 0.04 per unit of risk. If you would invest 2,759 in United Natural Foods on November 3, 2024 and sell it today you would earn a total of 218.00 from holding United Natural Foods or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Mamas Creations
Performance |
| Timeline |
| United Natural Foods |
| Mamas Creations |
United Natural and Mamas Creations Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Mamas Creations
The main advantage of trading using opposite United Natural and Mamas Creations positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Mamas Creations 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 Mamas Creations will offset losses from the drop in Mamas Creations' long position.| United Natural vs. The Chefs Warehouse | United Natural vs. Mission Produce | United Natural vs. The Andersons | United Natural vs. Performance Food Group |
| Mamas Creations vs. Estee Lauder Companies | Mamas Creations vs. Lincoln Electric Holdings | Mamas Creations vs. Coty Inc | Mamas Creations vs. Procter Gamble |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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