Correlation Between Infrastrutture Wireless and United Natural

Can any of the company-specific risk be diversified away by investing in both Infrastrutture Wireless and United Natural 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 Infrastrutture Wireless and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Infrastrutture Wireless Italiane and United Natural Foods, you can compare the effects of market volatilities on Infrastrutture Wireless and United Natural 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 Infrastrutture Wireless with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infrastrutture Wireless and United Natural.

Diversification Opportunities for Infrastrutture Wireless and United Natural

-0.64

Correlation Coefficient

Infrastrutture Wireless  United Natural

Excellent diversification

The 3 months correlation between Infrastrutture and United is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Infrastrutture Wireless Italia and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods and Infrastrutture Wireless 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 Infrastrutture Wireless Italiane are associated (or correlated) with United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Infrastrutture Wireless i.e., Infrastrutture Wireless and United Natural go up and down completely randomly.

Pair Corralation between Infrastrutture Wireless and United Natural

Assuming the 90 days horizon Infrastrutture Wireless Italiane is expected to under-perform the United Natural. But the stock apears to be less risky and, when comparing its historical volatility, Infrastrutture Wireless Italiane is 3.81 times less risky than United Natural. The stock trades about -0.12 of its potential returns per unit of risk. The United Natural Foods is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,727  in United Natural Foods on October 7, 2024 and sell it today you would earn a total of  901.00  from holding United Natural Foods or generate 52.17% return on investment over 90 days.

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

Infrastrutture Wireless Italia  vs.  United Natural Foods

Infrastrutture Wireless

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Infrastrutture Wireless Italiane has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

United Natural Foods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Natural reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Infrastrutture Wireless and United Natural

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

The idea behind Infrastrutture Wireless Italiane and United Natural Foods 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.