Correlation Between United Natural and Tesla
Can any of the company-specific risk be diversified away by investing in both United Natural and Tesla 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 Tesla 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 Tesla Inc, you can compare the effects of market volatilities on United Natural and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Tesla.
Diversification Opportunities for United Natural and Tesla
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between United and Tesla is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Tesla Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla 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 Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc has no effect on the direction of United Natural i.e., United Natural and Tesla go up and down completely randomly.
Pair Corralation between United Natural and Tesla
Given the investment horizon of 90 days United Natural is expected to generate 41.42 times less return on investment than Tesla. In addition to that, United Natural is 1.06 times more volatile than Tesla Inc. It trades about 0.0 of its total potential returns per unit of risk. Tesla Inc is currently generating about 0.06 per unit of volatility. If you would invest 19,464 in Tesla Inc on November 2, 2024 and sell it today you would earn a total of 22,465 from holding Tesla Inc or generate 115.42% 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. Tesla Inc
Performance |
| Timeline |
| United Natural Foods |
| Tesla Inc |
United Natural and Tesla Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Tesla
The main advantage of trading using opposite United Natural and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla'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 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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