Correlation Between United Natural and Wallbox NV

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

Diversification Opportunities for United Natural and Wallbox NV

0.52

Correlation Coefficient

United Natural  Wallbox NV

Very weak diversification

The 3 months correlation between United and Wallbox is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Wallbox NV WT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wallbox NV WT 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 Wallbox NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wallbox NV WT has no effect on the direction of United Natural i.e., United Natural and Wallbox NV go up and down completely randomly.

Pair Corralation between United Natural and Wallbox NV

Given the investment horizon of 90 days United Natural is expected to generate 64.81 times less return on investment than Wallbox NV. But when comparing it to its historical volatility, United Natural Foods is 11.85 times less risky than Wallbox NV. It trades about 0.02 of its potential returns per unit of risk. Wallbox NV WT is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4.01  in Wallbox NV WT on December 20, 2024 and sell it today you would lose (1.96) from holding Wallbox NV WT or give up 48.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	70.0%
Values	Daily Returns

United Natural Foods  vs.  Wallbox NV WT

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.

Wallbox NV WT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Wallbox NV WT are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Wallbox NV unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with United Natural and Wallbox NV

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

The idea behind United Natural Foods and Wallbox NV WT 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.