Correlation Between AUSTEVOLL SEAFOOD and United Natural
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and United Natural Foods, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and United Natural.
Diversification Opportunities for AUSTEVOLL SEAFOOD and United Natural
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUSTEVOLL and United is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and United Natural go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and United Natural
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 1.66 times more return on investment than United Natural. However, AUSTEVOLL SEAFOOD is 1.66 times more volatile than United Natural Foods. It trades about 0.05 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.01 per unit of risk. If you would invest 355.00 in AUSTEVOLL SEAFOOD on August 29, 2024 and sell it today you would earn a total of 496.00 from holding AUSTEVOLL SEAFOOD or generate 139.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. United Natural Foods
Performance |
| Timeline |
| AUSTEVOLL SEAFOOD |
| United Natural Foods |
AUSTEVOLL SEAFOOD and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSTEVOLL SEAFOOD and United Natural
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD 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.| AUSTEVOLL SEAFOOD vs. TITAN MACHINERY | AUSTEVOLL SEAFOOD vs. ADRIATIC METALS LS 013355 | AUSTEVOLL SEAFOOD vs. GREENX METALS LTD | AUSTEVOLL SEAFOOD vs. Granite Construction |
| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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