Correlation Between United Natural and BANK MANDIRI

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

Diversification Opportunities for United Natural and BANK MANDIRI

-0.67

Correlation Coefficient

United Natural  BANK MANDIRI

Excellent diversification

The 3 months correlation between United and BANK is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and BANK MANDIRI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK MANDIRI 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 BANK MANDIRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK MANDIRI has no effect on the direction of United Natural i.e., United Natural and BANK MANDIRI go up and down completely randomly.

Pair Corralation between United Natural and BANK MANDIRI

Assuming the 90 days horizon United Natural Foods is expected to generate 2.02 times more return on investment than BANK MANDIRI. However, United Natural is 2.02 times more volatile than BANK MANDIRI. It trades about 0.19 of its potential returns per unit of risk. BANK MANDIRI is currently generating about -0.04 per unit of risk. If you would invest  1,340  in United Natural Foods on September 3, 2024 and sell it today you would earn a total of  950.00  from holding United Natural Foods or generate 70.9% return on investment over 90 days.

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

United Natural Foods  vs.  BANK MANDIRI

United Natural Foods

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 15 (%) 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.

BANK MANDIRI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BANK MANDIRI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, BANK MANDIRI is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with United Natural and BANK MANDIRI

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

The idea behind United Natural Foods and BANK MANDIRI 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.