Correlation Between 2G ENERGY and United Natural
Can any of the company-specific risk be diversified away by investing in both 2G ENERGY 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 2G ENERGY and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2G ENERGY and United Natural Foods, you can compare the effects of market volatilities on 2G ENERGY 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 2G ENERGY with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2G ENERGY and United Natural.
Diversification Opportunities for 2G ENERGY and United Natural
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2GB and United is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding 2G ENERGY 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 2G ENERGY 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 2G ENERGY 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 2G ENERGY i.e., 2G ENERGY and United Natural go up and down completely randomly.
Pair Corralation between 2G ENERGY and United Natural
Assuming the 90 days trading horizon 2G ENERGY is expected to under-perform the United Natural. In addition to that, 2G ENERGY is 1.14 times more volatile than United Natural Foods. It trades about -0.06 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.36 per unit of volatility. If you would invest 1,820 in United Natural Foods on August 29, 2024 and sell it today you would earn a total of 390.00 from holding United Natural Foods or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
2G ENERGY vs. United Natural Foods
Performance |
| Timeline |
| 2G ENERGY |
| United Natural Foods |
2G ENERGY and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2G ENERGY and United Natural
The main advantage of trading using opposite 2G ENERGY and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2G ENERGY 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.| 2G ENERGY vs. FISH PAYK HEALTH | 2G ENERGY vs. GREENX METALS LTD | 2G ENERGY vs. Lion One Metals | 2G ENERGY vs. Zijin Mining Group |
| United Natural vs. Superior Plus Corp | United Natural vs. SIVERS SEMICONDUCTORS AB | United Natural vs. Talanx AG | United Natural vs. 2G ENERGY |
Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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