Correlation Between United Guardian and Kenvue

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

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

Diversification Opportunities for United Guardian and Kenvue

-0.36

Correlation Coefficient

United Guardian  Kenvue

Very good diversification

The 3 months correlation between United and Kenvue is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Kenvue Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenvue Inc and United Guardian 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 Guardian are associated (or correlated) with Kenvue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenvue Inc has no effect on the direction of United Guardian i.e., United Guardian and Kenvue go up and down completely randomly.

Pair Corralation between United Guardian and Kenvue

Allowing for the 90-day total investment horizon United Guardian is expected to generate 22.8 times less return on investment than Kenvue. In addition to that, United Guardian is 1.42 times more volatile than Kenvue Inc. It trades about 0.0 of its total potential returns per unit of risk. Kenvue Inc is currently generating about 0.14 per unit of volatility. If you would invest  2,097  in Kenvue Inc on December 28, 2024 and sell it today you would earn a total of  253.00  from holding Kenvue Inc or generate 12.06% return on investment over 90 days.

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

United Guardian  vs.  Kenvue Inc

United Guardian

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Guardian has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, United Guardian is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Kenvue Inc

Risk-Adjusted Performance

OK

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

Pair Trading with United Guardian and Kenvue

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

The idea behind United Guardian and Kenvue Inc 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.