Correlation Between United Natural and SAIHEAT

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

Diversification Opportunities for United Natural and SAIHEAT

0.6

Correlation Coefficient

United Natural  SAIHEAT

Poor diversification

The 3 months correlation between United and SAIHEAT is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of United Natural i.e., United Natural and SAIHEAT go up and down completely randomly.

Pair Corralation between United Natural and SAIHEAT

Given the investment horizon of 90 days United Natural Foods is expected to generate 0.24 times more return on investment than SAIHEAT. However, United Natural Foods is 4.16 times less risky than SAIHEAT. It trades about 0.15 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about -0.12 per unit of risk. If you would invest  2,087  in United Natural Foods on October 26, 2024 and sell it today you would earn a total of  670.00  from holding United Natural Foods or generate 32.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	33.9%
Values	Daily Returns

United Natural Foods  vs.  SAIHEAT Limited

United Natural Foods

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 11 (%) 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.

SAIHEAT Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAIHEAT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with United Natural and SAIHEAT

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

The idea behind United Natural Foods and SAIHEAT Limited 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.