Correlation Between United Natural and GUOTAI JUNAN
Can any of the company-specific risk be diversified away by investing in both United Natural and GUOTAI JUNAN 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 GUOTAI JUNAN 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 GUOTAI JUNAN SEC, you can compare the effects of market volatilities on United Natural and GUOTAI JUNAN 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 GUOTAI JUNAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and GUOTAI JUNAN.
Diversification Opportunities for United Natural and GUOTAI JUNAN
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and GUOTAI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and GUOTAI JUNAN SEC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUOTAI JUNAN SEC 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 GUOTAI JUNAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUOTAI JUNAN SEC has no effect on the direction of United Natural i.e., United Natural and GUOTAI JUNAN go up and down completely randomly.
Pair Corralation between United Natural and GUOTAI JUNAN
Assuming the 90 days horizon United Natural is expected to generate 1.99 times less return on investment than GUOTAI JUNAN. But when comparing it to its historical volatility, United Natural Foods is 1.46 times less risky than GUOTAI JUNAN. It trades about 0.07 of its potential returns per unit of risk. GUOTAI JUNAN SEC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 47.00 in GUOTAI JUNAN SEC on August 26, 2024 and sell it today you would earn a total of 90.00 from holding GUOTAI JUNAN SEC or generate 191.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. GUOTAI JUNAN SEC
Performance |
| Timeline |
| United Natural Foods |
| GUOTAI JUNAN SEC |
United Natural and GUOTAI JUNAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and GUOTAI JUNAN
The main advantage of trading using opposite United Natural and GUOTAI JUNAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, GUOTAI JUNAN 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 GUOTAI JUNAN will offset losses from the drop in GUOTAI JUNAN's long position.| United Natural vs. Sysco | United Natural vs. Jernimo Martins SGPS | United Natural vs. Bunzl plc | United Natural vs. Performance Food Group |
| GUOTAI JUNAN vs. MeVis Medical Solutions | GUOTAI JUNAN vs. ITALIAN WINE BRANDS | GUOTAI JUNAN vs. SCANDMEDICAL SOLDK 040 | GUOTAI JUNAN 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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