Correlation Between United Natural and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both United Natural and Teladoc Health 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 Teladoc Health 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 Teladoc Health, you can compare the effects of market volatilities on United Natural and Teladoc Health 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 Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Teladoc Health.
Diversification Opportunities for United Natural and Teladoc Health
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Teladoc is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods, and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of United Natural i.e., United Natural and Teladoc Health go up and down completely randomly.
Pair Corralation between United Natural and Teladoc Health
Assuming the 90 days trading horizon United Natural Foods, is expected to generate 0.94 times more return on investment than Teladoc Health. However, United Natural Foods, is 1.07 times less risky than Teladoc Health. It trades about 0.15 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.02 per unit of risk. If you would invest 2,818 in United Natural Foods, on October 14, 2024 and sell it today you would earn a total of 1,282 from holding United Natural Foods, or generate 45.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 13.86% |
| Values | Daily Returns |
United Natural Foods, vs. Teladoc Health
Performance |
| Timeline |
| United Natural Foods, |
| Teladoc Health |
United Natural and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Teladoc Health
The main advantage of trading using opposite United Natural and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health's long position.| United Natural vs. Taiwan Semiconductor Manufacturing | United Natural vs. Apple Inc | United Natural vs. Alibaba Group Holding | United Natural vs. Banco Santander Chile |
| Teladoc Health vs. Ross Stores | Teladoc Health vs. Check Point Software | Teladoc Health vs. British American Tobacco | Teladoc Health vs. United Natural Foods, |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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