Correlation Between United Natural and AIR LIQUIDE
Can any of the company-specific risk be diversified away by investing in both United Natural and AIR LIQUIDE 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 AIR LIQUIDE 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 AIR LIQUIDE ADR, you can compare the effects of market volatilities on United Natural and AIR LIQUIDE 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 AIR LIQUIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and AIR LIQUIDE.
Diversification Opportunities for United Natural and AIR LIQUIDE
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and AIR is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and AIR LIQUIDE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR LIQUIDE ADR 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 AIR LIQUIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR LIQUIDE ADR has no effect on the direction of United Natural i.e., United Natural and AIR LIQUIDE go up and down completely randomly.
Pair Corralation between United Natural and AIR LIQUIDE
Assuming the 90 days horizon United Natural Foods is expected to generate 2.24 times more return on investment than AIR LIQUIDE. However, United Natural is 2.24 times more volatile than AIR LIQUIDE ADR. It trades about 0.02 of its potential returns per unit of risk. AIR LIQUIDE ADR is currently generating about 0.02 per unit of risk. If you would invest 2,168 in United Natural Foods on August 31, 2024 and sell it today you would earn a total of 122.00 from holding United Natural Foods or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. AIR LIQUIDE ADR
Performance |
| Timeline |
| United Natural Foods |
| AIR LIQUIDE ADR |
United Natural and AIR LIQUIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and AIR LIQUIDE
The main advantage of trading using opposite United Natural and AIR LIQUIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, AIR LIQUIDE 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 AIR LIQUIDE will offset losses from the drop in AIR LIQUIDE'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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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