Correlation Between United Natural and 1 800

Can any of the company-specific risk be diversified away by investing in both United Natural and 1 800 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 1 800 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 1 800 FLOWERSCOM, you can compare the effects of market volatilities on United Natural and 1 800 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 1 800. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and 1 800.

Diversification Opportunities for United Natural and 1 800

-0.36

Correlation Coefficient

United Natural  1 800

Very good diversification

The 3 months correlation between United and FLWS is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and 1 800 FLOWERSCOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 1 800 FLOWERSCOM 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 1 800. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 1 800 FLOWERSCOM has no effect on the direction of United Natural i.e., United Natural and 1 800 go up and down completely randomly.

Pair Corralation between United Natural and 1 800

Given the investment horizon of 90 days United Natural Foods is expected to generate 0.72 times more return on investment than 1 800. However, United Natural Foods is 1.38 times less risky than 1 800. It trades about -0.04 of its potential returns per unit of risk. 1 800 FLOWERSCOM is currently generating about -0.16 per unit of risk. If you would invest  2,962  in United Natural Foods on October 11, 2024 and sell it today you would lose (77.00) from holding United Natural Foods or give up 2.6% of portfolio value over 90 days.

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

United Natural Foods  vs.  1 800 FLOWERSCOM

United Natural Foods

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, United Natural demonstrated solid returns over the last few months and may actually be approaching a breakup point.

1 800 FLOWERSCOM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 1 800 FLOWERSCOM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with United Natural and 1 800

The main advantage of trading using opposite United Natural and 1 800 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, 1 800 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 1 800 will offset losses from the drop in 1 800's long position.

The idea behind United Natural Foods and 1 800 FLOWERSCOM 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.