Correlation Between SpartanNash and United Natural

Can any of the company-specific risk be diversified away by investing in both SpartanNash 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 SpartanNash and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SpartanNash Co and United Natural Foods, you can compare the effects of market volatilities on SpartanNash 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 SpartanNash with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of SpartanNash and United Natural.

Diversification Opportunities for SpartanNash and United Natural

0.13

Correlation Coefficient

SpartanNash  United Natural

Average diversification

The 3 months correlation between SpartanNash and United is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding SpartanNash Co 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 SpartanNash 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 SpartanNash Co 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 SpartanNash i.e., SpartanNash and United Natural go up and down completely randomly.

Pair Corralation between SpartanNash and United Natural

Given the investment horizon of 90 days SpartanNash Co is expected to generate 0.67 times more return on investment than United Natural. However, SpartanNash Co is 1.49 times less risky than United Natural. It trades about 0.1 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  1,783  in SpartanNash Co on December 30, 2024 and sell it today you would earn a total of  220.00  from holding SpartanNash Co or generate 12.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SpartanNash Co  vs.  United Natural Foods

SpartanNash

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SpartanNash Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, SpartanNash displayed solid returns over the last few months and may actually be approaching a breakup point.

United Natural Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Natural Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, United Natural is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with SpartanNash and United Natural

The main advantage of trading using opposite SpartanNash and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SpartanNash 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.

The idea behind SpartanNash Co and United Natural Foods 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.