Correlation Between United Natural and Asahi Group
Can any of the company-specific risk be diversified away by investing in both United Natural and Asahi Group 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 Asahi Group 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 Asahi Group Holdings, you can compare the effects of market volatilities on United Natural and Asahi Group 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 Asahi Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Asahi Group.
Diversification Opportunities for United Natural and Asahi Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Asahi is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Asahi Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asahi Group Holdings 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 Asahi Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asahi Group Holdings has no effect on the direction of United Natural i.e., United Natural and Asahi Group go up and down completely randomly.
Pair Corralation between United Natural and Asahi Group
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Asahi Group. In addition to that, United Natural is 2.28 times more volatile than Asahi Group Holdings. It trades about -0.01 of its total potential returns per unit of risk. Asahi Group Holdings is currently generating about 0.01 per unit of volatility. If you would invest 1,010 in Asahi Group Holdings on August 29, 2024 and sell it today you would lose (21.00) from holding Asahi Group Holdings or give up 2.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Asahi Group Holdings
Performance |
| Timeline |
| United Natural Foods |
| Asahi Group Holdings |
United Natural and Asahi Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Asahi Group
The main advantage of trading using opposite United Natural and Asahi Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Asahi Group 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 Asahi Group will offset losses from the drop in Asahi Group's long position.| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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