Correlation Between United Natural and Cheche Group
Can any of the company-specific risk be diversified away by investing in both United Natural and Cheche Group 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 Cheche Group 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 Cheche Group Class, you can compare the effects of market volatilities on United Natural and Cheche Group 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 Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Cheche Group.
Diversification Opportunities for United Natural and Cheche Group
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between United and Cheche is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class 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 Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of United Natural i.e., United Natural and Cheche Group go up and down completely randomly.
Pair Corralation between United Natural and Cheche Group
Given the investment horizon of 90 days United Natural Foods is expected to generate 1.02 times more return on investment than Cheche Group. However, United Natural is 1.02 times more volatile than Cheche Group Class. It trades about 0.15 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.06 per unit of risk. If you would invest 2,087 in United Natural Foods on October 26, 2024 and sell it today you would earn a total of 670.00 from holding United Natural Foods or generate 32.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. Cheche Group Class
Performance |
| Timeline |
| United Natural Foods |
| Cheche Group Class |
United Natural and Cheche Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Cheche Group
The main advantage of trading using opposite United Natural and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Cheche Group 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 Cheche Group will offset losses from the drop in Cheche Group's long position.| United Natural vs. The Chefs Warehouse | United Natural vs. Mission Produce | United Natural vs. The Andersons | United Natural vs. Performance Food Group |
| Cheche Group vs. Live Ventures | Cheche Group vs. Autohome | Cheche Group vs. Lowes Companies | Cheche Group vs. JetBlue Airways Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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