Correlation Between United Natural and CRRC
Can any of the company-specific risk be diversified away by investing in both United Natural and CRRC 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 CRRC 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 CRRC Limited, you can compare the effects of market volatilities on United Natural and CRRC 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 CRRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and CRRC.
Diversification Opportunities for United Natural and CRRC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and CRRC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and CRRC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRRC Limited 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 CRRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRRC Limited has no effect on the direction of United Natural i.e., United Natural and CRRC go up and down completely randomly.
Pair Corralation between United Natural and CRRC
Assuming the 90 days horizon United Natural is expected to generate 1.76 times less return on investment than CRRC. But when comparing it to its historical volatility, United Natural Foods is 1.11 times less risky than CRRC. It trades about 0.07 of its potential returns per unit of risk. CRRC Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 24.00 in CRRC Limited on September 3, 2024 and sell it today you would earn a total of 37.00 from holding CRRC Limited or generate 154.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. CRRC Limited
Performance |
| Timeline |
| United Natural Foods |
| CRRC Limited |
United Natural and CRRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and CRRC
The main advantage of trading using opposite United Natural and CRRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, CRRC 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 CRRC will offset losses from the drop in CRRC's long position.| United Natural vs. Performance Food Group | United Natural vs. Superior Plus Corp | United Natural vs. NMI Holdings | United Natural vs. Origin Agritech |
| CRRC vs. Superior Plus Corp | CRRC vs. NMI Holdings | CRRC vs. Origin Agritech | CRRC vs. SIVERS SEMICONDUCTORS AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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