Correlation Between United Natural and STAG Industrial,

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

Diversification Opportunities for United Natural and STAG Industrial,

0.31

Correlation Coefficient

United Natural  STAG Industrial,

Weak diversification

The 3 months correlation between United and STAG is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods, and STAG Industrial, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial, 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 STAG Industrial,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial, has no effect on the direction of United Natural i.e., United Natural and STAG Industrial, go up and down completely randomly.

Pair Corralation between United Natural and STAG Industrial,

Assuming the 90 days trading horizon United Natural Foods, is expected to generate 2.79 times more return on investment than STAG Industrial,. However, United Natural is 2.79 times more volatile than STAG Industrial,. It trades about 0.18 of its potential returns per unit of risk. STAG Industrial, is currently generating about -0.04 per unit of risk. If you would invest  3,114  in United Natural Foods, on October 7, 2024 and sell it today you would earn a total of  1,065  from holding United Natural Foods, or generate 34.2% return on investment over 90 days.

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

United Natural Foods,  vs.  STAG Industrial,

United Natural Foods,

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods, are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United Natural sustained solid returns over the last few months and may actually be approaching a breakup point.

STAG Industrial,

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STAG Industrial, are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, STAG Industrial, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Natural and STAG Industrial,

The main advantage of trading using opposite United Natural and STAG Industrial, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, STAG Industrial, 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 STAG Industrial, will offset losses from the drop in STAG Industrial,'s long position.

The idea behind United Natural Foods, and STAG Industrial, 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..