Correlation Between United Natural and Nel ASA
Can any of the company-specific risk be diversified away by investing in both United Natural and Nel ASA 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 Nel ASA 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 Nel ASA, you can compare the effects of market volatilities on United Natural and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Nel ASA.
Diversification Opportunities for United Natural and Nel ASA
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between United and Nel is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of United Natural i.e., United Natural and Nel ASA go up and down completely randomly.
Pair Corralation between United Natural and Nel ASA
Assuming the 90 days horizon United Natural Foods is expected to generate 0.94 times more return on investment than Nel ASA. However, United Natural Foods is 1.06 times less risky than Nel ASA. It trades about 0.01 of its potential returns per unit of risk. Nel ASA is currently generating about -0.07 per unit of risk. If you would invest 2,442 in United Natural Foods on August 29, 2024 and sell it today you would lose (232.00) from holding United Natural Foods or give up 9.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Nel ASA
Performance |
| Timeline |
| United Natural Foods |
| Nel ASA |
United Natural and Nel ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Nel ASA
The main advantage of trading using opposite United Natural and Nel ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Nel ASA 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 Nel ASA will offset losses from the drop in Nel ASA'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 |
| Nel ASA vs. Superior Plus Corp | Nel ASA vs. NMI Holdings | Nel ASA vs. Origin Agritech | Nel ASA 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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