Correlation Between United Natural and BE Semiconductor

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

Diversification Opportunities for United Natural and BE Semiconductor

UnitedBSIDiversified AwayUnitedBSIDiversified Away100%
0.9
  Correlation Coefficient

Almost no diversification

The 3 months correlation between United and BSI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of United Natural i.e., United Natural and BE Semiconductor go up and down completely randomly.

Pair Corralation between United Natural and BE Semiconductor

Assuming the 90 days horizon United Natural Foods is expected to generate 1.62 times more return on investment than BE Semiconductor. However, United Natural is 1.62 times more volatile than BE Semiconductor Industries. It trades about 0.16 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about 0.19 per unit of risk. If you would invest  1,820  in United Natural Foods on October 26, 2024 and sell it today you would earn a total of  754.00  from holding United Natural Foods or generate 41.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

United Natural Foods  vs.  BE Semiconductor Industries

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 01020304050
JavaScript chart by amCharts 3.21.15UN3 BSI
       Timeline  
United Natural Foods 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Natural reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan18202224262830
BE Semiconductor Ind 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in BE Semiconductor Industries are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BE Semiconductor unveiled solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan100110120130140150

United Natural and BE Semiconductor Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-12.78-9.57-6.36-3.150.03.256.6710.0913.5116.93 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15UN3 BSI
       Returns  

Pair Trading with United Natural and BE Semiconductor

The main advantage of trading using opposite United Natural and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.
The idea behind United Natural Foods and BE Semiconductor Industries 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.
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.

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