Correlation Between Intel and United Natural
Can any of the company-specific risk be diversified away by investing in both Intel 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 Intel and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and United Natural Foods, you can compare the effects of market volatilities on Intel 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 Intel with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and United Natural.
Diversification Opportunities for Intel and United Natural
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intel and United is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Intel 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 Intel 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 Intel 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 Intel i.e., Intel and United Natural go up and down completely randomly.
Pair Corralation between Intel and United Natural
Assuming the 90 days trading horizon Intel is expected to generate 1.28 times less return on investment than United Natural. In addition to that, Intel is 1.12 times more volatile than United Natural Foods. It trades about 0.24 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.35 per unit of volatility. If you would invest 1,852 in United Natural Foods on September 4, 2024 and sell it today you would earn a total of 438.00 from holding United Natural Foods or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. United Natural Foods
Performance |
| Timeline |
| Intel |
| United Natural Foods |
Intel and United Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and United Natural
The main advantage of trading using opposite Intel and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel 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.| Intel vs. United Natural Foods | Intel vs. National Beverage Corp | Intel vs. Food Life Companies | Intel vs. Fevertree Drinks PLC |
| United Natural vs. Performance Food Group | United Natural vs. Superior Plus Corp | United Natural vs. NMI Holdings | United Natural vs. Origin Agritech |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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