Correlation Between United Natural and Netflix
Can any of the company-specific risk be diversified away by investing in both United Natural and Netflix 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 Netflix 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 Netflix, you can compare the effects of market volatilities on United Natural and Netflix 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 Netflix. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Netflix.
Diversification Opportunities for United Natural and Netflix
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Netflix is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Netflix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netflix 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 Netflix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netflix has no effect on the direction of United Natural i.e., United Natural and Netflix go up and down completely randomly.
Pair Corralation between United Natural and Netflix
Assuming the 90 days horizon United Natural Foods is expected to generate 1.58 times more return on investment than Netflix. However, United Natural is 1.58 times more volatile than Netflix. It trades about 0.34 of its potential returns per unit of risk. Netflix is currently generating about 0.45 per unit of risk. If you would invest 1,893 in United Natural Foods on August 30, 2024 and sell it today you would earn a total of 405.00 from holding United Natural Foods or generate 21.39% 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. Netflix
Performance |
| Timeline |
| United Natural Foods |
| Netflix |
United Natural and Netflix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Netflix
The main advantage of trading using opposite United Natural and Netflix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Netflix 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 Netflix will offset losses from the drop in Netflix'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 |
| Netflix vs. ABO GROUP ENVIRONMENT | Netflix vs. United States Steel | Netflix vs. HF FOODS GRP | Netflix vs. United Natural 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.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |