Correlation Between United Natural and Gen Digital
Can any of the company-specific risk be diversified away by investing in both United Natural and Gen Digital 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 Gen Digital 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 Gen Digital, you can compare the effects of market volatilities on United Natural and Gen Digital 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 Gen Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Gen Digital.
Diversification Opportunities for United Natural and Gen Digital
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Gen is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods, and Gen Digital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gen Digital 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 Gen Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gen Digital has no effect on the direction of United Natural i.e., United Natural and Gen Digital go up and down completely randomly.
Pair Corralation between United Natural and Gen Digital
Assuming the 90 days trading horizon United Natural Foods, is expected to generate 5.43 times more return on investment than Gen Digital. However, United Natural is 5.43 times more volatile than Gen Digital. It trades about 0.14 of its potential returns per unit of risk. Gen Digital is currently generating about 0.0 per unit of risk. If you would invest 3,114 in United Natural Foods, on November 6, 2024 and sell it today you would earn a total of 1,066 from holding United Natural Foods, or generate 34.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.28% |
| Values | Daily Returns |
United Natural Foods, vs. Gen Digital
Performance |
| Timeline |
| United Natural Foods, |
| Gen Digital |
United Natural and Gen Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Gen Digital
The main advantage of trading using opposite United Natural and Gen Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Gen Digital 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 Gen Digital will offset losses from the drop in Gen Digital's long position.| United Natural vs. Marfrig Global Foods | United Natural vs. CM Hospitalar SA | United Natural vs. Elevance Health, | United Natural vs. PENN Entertainment, |
| Gen Digital vs. Martin Marietta Materials, | Gen Digital vs. Marfrig Global Foods | Gen Digital vs. Applied Materials, | Gen Digital vs. New Oriental Education |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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