Correlation Between TIANDE CHEMICAL and United Natural

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

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

Diversification Opportunities for TIANDE CHEMICAL and United Natural

0.24

Correlation Coefficient

TIANDE CHEMICAL  United Natural

Modest diversification

The 3 months correlation between TIANDE and United is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL 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 TIANDE CHEMICAL i.e., TIANDE CHEMICAL and United Natural go up and down completely randomly.

Pair Corralation between TIANDE CHEMICAL and United Natural

Assuming the 90 days trading horizon TIANDE CHEMICAL is expected to generate 0.9 times more return on investment than United Natural. However, TIANDE CHEMICAL is 1.11 times less risky than United Natural. It trades about 0.06 of its potential returns per unit of risk. United Natural Foods is currently generating about 0.0 per unit of risk. If you would invest  3.08  in TIANDE CHEMICAL on October 10, 2024 and sell it today you would earn a total of  4.17  from holding TIANDE CHEMICAL or generate 135.39% return on investment over 90 days.

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

TIANDE CHEMICAL  vs.  United Natural Foods

TIANDE CHEMICAL

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TIANDE CHEMICAL are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, TIANDE CHEMICAL exhibited solid returns over the last few months and may actually be approaching a breakup point.

United Natural Foods

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Natural reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TIANDE CHEMICAL and United Natural

The main advantage of trading using opposite TIANDE CHEMICAL and United Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TIANDE CHEMICAL 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 TIANDE CHEMICAL 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.