Correlation Between United Natural and Carlyle
Can any of the company-specific risk be diversified away by investing in both United Natural and Carlyle 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 Carlyle 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 Carlyle Group, you can compare the effects of market volatilities on United Natural and Carlyle 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 Carlyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Carlyle.
Diversification Opportunities for United Natural and Carlyle
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Carlyle is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Carlyle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Group 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 Carlyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Group has no effect on the direction of United Natural i.e., United Natural and Carlyle go up and down completely randomly.
Pair Corralation between United Natural and Carlyle
Assuming the 90 days horizon United Natural Foods is expected to generate 1.9 times more return on investment than Carlyle. However, United Natural is 1.9 times more volatile than Carlyle Group. It trades about 0.19 of its potential returns per unit of risk. Carlyle Group is currently generating about 0.22 per unit of risk. If you would invest 1,341 in United Natural Foods on August 31, 2024 and sell it today you would earn a total of 957.00 from holding United Natural Foods or generate 71.36% 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. Carlyle Group
Performance |
| Timeline |
| United Natural Foods |
| Carlyle Group |
United Natural and Carlyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Carlyle
The main advantage of trading using opposite United Natural and Carlyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Carlyle 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 Carlyle will offset losses from the drop in Carlyle's long position.| United Natural vs. Charter Communications | United Natural vs. Perseus Mining Limited | United Natural vs. Jacquet Metal Service | United Natural vs. SBA Communications Corp |
| Carlyle vs. The Boston Beer | Carlyle vs. Uber Technologies | Carlyle vs. GLG LIFE TECH | Carlyle vs. THORNEY TECHS LTD |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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