Correlation Between Willamette Valley and United Natural
Can any of the company-specific risk be diversified away by investing in both Willamette Valley and United Natural 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 Willamette Valley and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willamette Valley Vineyards and United Natural Foods, you can compare the effects of market volatilities on Willamette Valley and United Natural 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 Willamette Valley with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willamette Valley and United Natural.
Diversification Opportunities for Willamette Valley and United Natural
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Willamette and United is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Willamette Valley Vineyards and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods and Willamette Valley 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 Willamette Valley Vineyards are associated (or correlated) with United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Willamette Valley i.e., Willamette Valley and United Natural go up and down completely randomly.
Pair Corralation between Willamette Valley and United Natural
Assuming the 90 days horizon Willamette Valley Vineyards is expected to under-perform the United Natural. But the preferred stock apears to be less risky and, when comparing its historical volatility, Willamette Valley Vineyards is 1.38 times less risky than United Natural. The preferred stock trades about -0.05 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.16 of returns per unit of risk over similar time horizon. 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 | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willamette Valley Vineyards vs. United Natural Foods
Performance |
| Timeline |
| Willamette Valley |
| United Natural Foods |
Willamette Valley and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willamette Valley and United Natural
The main advantage of trading using opposite Willamette Valley and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willamette Valley position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.| Willamette Valley vs. Naked Wines plc | Willamette Valley vs. Pernod Ricard SA | Willamette Valley vs. Brown Forman | Willamette Valley vs. Treasury Wine Estates |
| United Natural vs. The Chefs Warehouse | United Natural vs. Mission Produce | United Natural vs. The Andersons | United Natural vs. Performance Food 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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