Correlation Between United Natural and Expedia
Can any of the company-specific risk be diversified away by investing in both United Natural and Expedia 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 Expedia 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 Expedia Group, you can compare the effects of market volatilities on United Natural and Expedia 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 Expedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Expedia.
Diversification Opportunities for United Natural and Expedia
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Expedia is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Expedia Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expedia Group 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 Expedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expedia Group has no effect on the direction of United Natural i.e., United Natural and Expedia go up and down completely randomly.
Pair Corralation between United Natural and Expedia
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Expedia. In addition to that, United Natural is 1.47 times more volatile than Expedia Group. It trades about -0.01 of its total potential returns per unit of risk. Expedia Group is currently generating about 0.07 per unit of volatility. If you would invest 8,651 in Expedia Group on August 28, 2024 and sell it today you would earn a total of 8,907 from holding Expedia Group or generate 102.96% 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. Expedia Group
Performance |
| Timeline |
| United Natural Foods |
| Expedia Group |
United Natural and Expedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Expedia
The main advantage of trading using opposite United Natural and Expedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Expedia 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 Expedia will offset losses from the drop in Expedia's long position.| United Natural vs. Lion One Metals | United Natural vs. LION ONE METALS | United Natural vs. GREENX METALS LTD | United Natural vs. Harmony Gold Mining |
| Expedia vs. Playtech plc | Expedia vs. Molson Coors Beverage | Expedia vs. PLAYTIKA HOLDING DL 01 | Expedia vs. JD SPORTS FASH |
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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