Correlation Between United Natural and Reitar Logtech

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

Diversification Opportunities for United Natural and Reitar Logtech

-0.54

Correlation Coefficient

United Natural  Reitar Logtech

Excellent diversification

The 3 months correlation between United and Reitar is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Reitar Logtech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitar Logtech Holdings 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 Reitar Logtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitar Logtech Holdings has no effect on the direction of United Natural i.e., United Natural and Reitar Logtech go up and down completely randomly.

Pair Corralation between United Natural and Reitar Logtech

Given the investment horizon of 90 days United Natural Foods is expected to generate 0.46 times more return on investment than Reitar Logtech. However, United Natural Foods is 2.19 times less risky than Reitar Logtech. It trades about 0.02 of its potential returns per unit of risk. Reitar Logtech Holdings is currently generating about -0.01 per unit of risk. If you would invest  2,588  in United Natural Foods on December 20, 2024 and sell it today you would earn a total of  19.00  from holding United Natural Foods or generate 0.73% 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.  Reitar Logtech Holdings

United Natural Foods

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Reitar Logtech Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Reitar Logtech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Reitar Logtech is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with United Natural and Reitar Logtech

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

The idea behind United Natural Foods and Reitar Logtech Holdings 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.