Correlation Between Inflection Point and United Natural

Can any of the company-specific risk be diversified away by investing in both Inflection Point and United Natural 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 Inflection Point and United Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inflection Point Acquisition and United Natural Foods, you can compare the effects of market volatilities on Inflection Point and United Natural 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 Inflection Point with a short position of United Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inflection Point and United Natural.

Diversification Opportunities for Inflection Point and United Natural

0.83

Correlation Coefficient

Inflection Point  United Natural

Very poor diversification

The 3 months correlation between Inflection and United is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Inflection Point Acquisition and United Natural Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Natural Foods and Inflection Point 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 Inflection Point Acquisition are associated (or correlated) with United Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Natural Foods has no effect on the direction of Inflection Point i.e., Inflection Point and United Natural go up and down completely randomly.

Pair Corralation between Inflection Point and United Natural

Assuming the 90 days horizon Inflection Point is expected to generate 1.88 times less return on investment than United Natural. In addition to that, Inflection Point is 1.06 times more volatile than United Natural Foods. It trades about 0.08 of its total potential returns per unit of risk. United Natural Foods is currently generating about 0.15 per unit of volatility. If you would invest  2,468  in United Natural Foods on October 8, 2024 and sell it today you would earn a total of  342.00  from holding United Natural Foods or generate 13.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Inflection Point Acquisition  vs.  United Natural Foods

Inflection Point Acq

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inflection Point Acquisition are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Inflection Point unveiled solid returns over the last few months and may actually be approaching a breakup point.

United Natural Foods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile technical and fundamental indicators, United Natural demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inflection Point and United Natural

The main advantage of trading using opposite Inflection Point and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inflection Point position performs unexpectedly, United Natural 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 United Natural will offset losses from the drop in United Natural's long position.

The idea behind Inflection Point Acquisition and United Natural Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.