Correlation Between Integral and United Natural
Can any of the company-specific risk be diversified away by investing in both Integral 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 Integral and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Integral Ad Science and United Natural Foods, you can compare the effects of market volatilities on Integral 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 Integral with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Integral and United Natural.
Diversification Opportunities for Integral and United Natural
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Integral and United is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science 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 Integral 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 Integral Ad Science 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 Integral i.e., Integral and United Natural go up and down completely randomly.
Pair Corralation between Integral and United Natural
Considering the 90-day investment horizon Integral is expected to generate 93.37 times less return on investment than United Natural. But when comparing it to its historical volatility, Integral Ad Science is 1.58 times less risky than United Natural. It trades about 0.0 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,522 in United Natural Foods on October 26, 2024 and sell it today you would earn a total of 1,314 from holding United Natural Foods or generate 86.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Integral Ad Science vs. United Natural Foods
Performance |
| Timeline |
| Integral Ad Science |
| United Natural Foods |
Integral and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Integral and United Natural
The main advantage of trading using opposite Integral and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Integral 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 Integral Ad Science 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.| United Natural vs. The Chefs Warehouse | United Natural vs. Mission Produce | United Natural vs. The Andersons | United Natural vs. Performance Food Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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