Correlation Between United Natural and Hyundai
Can any of the company-specific risk be diversified away by investing in both United Natural and Hyundai 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 Hyundai 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 Hyundai Motor, you can compare the effects of market volatilities on United Natural and Hyundai 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 Hyundai. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Hyundai.
Diversification Opportunities for United Natural and Hyundai
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between United and Hyundai is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Hyundai Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Motor 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 Hyundai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Motor has no effect on the direction of United Natural i.e., United Natural and Hyundai go up and down completely randomly.
Pair Corralation between United Natural and Hyundai
Assuming the 90 days horizon United Natural Foods is expected to generate 1.75 times more return on investment than Hyundai. However, United Natural is 1.75 times more volatile than Hyundai Motor. It trades about 0.16 of its potential returns per unit of risk. Hyundai Motor is currently generating about 0.03 per unit of risk. If you would invest 1,065 in United Natural Foods on August 29, 2024 and sell it today you would earn a total of 1,233 from holding United Natural Foods or generate 115.77% 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. Hyundai Motor
Performance |
| Timeline |
| United Natural Foods |
| Hyundai Motor |
United Natural and Hyundai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Hyundai
The main advantage of trading using opposite United Natural and Hyundai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Hyundai 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 Hyundai will offset losses from the drop in Hyundai's long position.| United Natural vs. Superior Plus Corp | United Natural vs. SIVERS SEMICONDUCTORS AB | United Natural vs. Talanx AG | United Natural vs. 2G ENERGY |
| Hyundai vs. THAI BEVERAGE | Hyundai vs. MOLSON RS BEVERAGE | Hyundai vs. PREMIER FOODS | Hyundai vs. Astral Foods Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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