Correlation Between United Natural and Trip Group
Can any of the company-specific risk be diversified away by investing in both United Natural and Trip 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 Trip 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 Trip Group Limited, you can compare the effects of market volatilities on United Natural and Trip 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 Trip Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Trip Group.
Diversification Opportunities for United Natural and Trip Group
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Trip is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Trip Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trip Group 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 Trip Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trip Group Limited has no effect on the direction of United Natural i.e., United Natural and Trip Group go up and down completely randomly.
Pair Corralation between United Natural and Trip Group
Assuming the 90 days horizon United Natural Foods is expected to generate 1.09 times more return on investment than Trip Group. However, United Natural is 1.09 times more volatile than Trip Group Limited. It trades about 0.35 of its potential returns per unit of risk. Trip Group Limited is currently generating about 0.07 per unit of risk. If you would invest 1,875 in United Natural Foods on August 31, 2024 and sell it today you would earn a total of 423.00 from holding United Natural Foods or generate 22.56% 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. Trip Group Limited
Performance |
| Timeline |
| United Natural Foods |
| Trip Group Limited |
United Natural and Trip Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Trip Group
The main advantage of trading using opposite United Natural and Trip Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Trip 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 Trip Group will offset losses from the drop in Trip Group'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 |
| Trip Group vs. Microbot Medical | Trip Group vs. MeVis Medical Solutions | Trip Group vs. PUBLIC STORAGE PRFO | Trip Group vs. Avanos Medical |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |