Correlation Between United Natural and Biogen
Can any of the company-specific risk be diversified away by investing in both United Natural and Biogen 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 Biogen 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 Biogen Inc, you can compare the effects of market volatilities on United Natural and Biogen 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 Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Biogen.
Diversification Opportunities for United Natural and Biogen
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Biogen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of United Natural i.e., United Natural and Biogen go up and down completely randomly.
Pair Corralation between United Natural and Biogen
Assuming the 90 days horizon United Natural Foods is expected to generate 2.28 times more return on investment than Biogen. However, United Natural is 2.28 times more volatile than Biogen Inc. It trades about 0.01 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.1 per unit of risk. If you would invest 2,424 in United Natural Foods on January 16, 2025 and sell it today you would lose (297.00) from holding United Natural Foods or give up 12.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Biogen Inc
Performance |
| Timeline |
| United Natural Foods |
| Biogen Inc |
United Natural and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Biogen
The main advantage of trading using opposite United Natural and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| United Natural vs. SANOK RUBBER ZY | United Natural vs. PARKEN Sport Entertainment | United Natural vs. GOODYEAR T RUBBER | United Natural vs. Hyster Yale Materials Handling |
| Biogen vs. Suntory Beverage Food | Biogen vs. MONEYSUPERMARKET | Biogen vs. CN MODERN DAIRY | Biogen vs. PREMIER FOODS |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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