Correlation Between United Natural and Lendlease
Can any of the company-specific risk be diversified away by investing in both United Natural and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on United Natural and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Lendlease.
Diversification Opportunities for United Natural and Lendlease
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Lendlease is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of United Natural i.e., United Natural and Lendlease go up and down completely randomly.
Pair Corralation between United Natural and Lendlease
Assuming the 90 days horizon United Natural Foods is expected to generate 3.87 times more return on investment than Lendlease. However, United Natural is 3.87 times more volatile than Lendlease Group. It trades about 0.19 of its potential returns per unit of risk. Lendlease Group is currently generating about -0.26 per unit of risk. If you would invest 2,242 in United Natural Foods on October 10, 2024 and sell it today you would earn a total of 473.00 from holding United Natural Foods or generate 21.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
United Natural Foods vs. Lendlease Group
Performance |
Timeline |
United Natural Foods |
Lendlease Group |
United Natural and Lendlease Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with United Natural and Lendlease
The main advantage of trading using opposite United Natural and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.United Natural vs. Austevoll Seafood ASA | United Natural vs. THAI BEVERAGE | United Natural vs. Endeavour Mining PLC | United Natural vs. SENECA FOODS A |
Lendlease vs. GWILLI FOOD | Lendlease vs. Xenia Hotels Resorts | Lendlease vs. Ebro Foods SA | Lendlease vs. INTERCONT HOTELS |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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