Correlation Between United Natural and TIMES CHINA
Can any of the company-specific risk be diversified away by investing in both United Natural and TIMES CHINA 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 TIMES CHINA 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 TIMES CHINA HLDGS, you can compare the effects of market volatilities on United Natural and TIMES CHINA 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 TIMES CHINA. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and TIMES CHINA.
Diversification Opportunities for United Natural and TIMES CHINA
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between United and TIMES is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and TIMES CHINA HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIMES CHINA HLDGS 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 TIMES CHINA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIMES CHINA HLDGS has no effect on the direction of United Natural i.e., United Natural and TIMES CHINA go up and down completely randomly.
Pair Corralation between United Natural and TIMES CHINA
Assuming the 90 days horizon United Natural Foods is expected to generate 0.4 times more return on investment than TIMES CHINA. However, United Natural Foods is 2.53 times less risky than TIMES CHINA. It trades about 0.19 of its potential returns per unit of risk. TIMES CHINA HLDGS is currently generating about -0.02 per unit of risk. If you would invest 2,584 in United Natural Foods on November 3, 2024 and sell it today you would earn a total of 262.00 from holding United Natural Foods or generate 10.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. TIMES CHINA HLDGS
Performance |
| Timeline |
| United Natural Foods |
| TIMES CHINA HLDGS |
United Natural and TIMES CHINA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and TIMES CHINA
The main advantage of trading using opposite United Natural and TIMES CHINA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, TIMES CHINA 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 TIMES CHINA will offset losses from the drop in TIMES CHINA's long position.| United Natural vs. Lamar Advertising | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. Gruppo Mutuionline SpA | United Natural vs. Salesforce |
| TIMES CHINA vs. PATTIES FOODS | TIMES CHINA vs. BW OFFSHORE LTD | TIMES CHINA vs. INTER CARS SA | TIMES CHINA vs. CN MODERN DAIRY |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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