Correlation Between United Natural and Thai Beverage

Can any of the company-specific risk be diversified away by investing in both United Natural and Thai Beverage 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 Thai Beverage 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 Thai Beverage PCL, you can compare the effects of market volatilities on United Natural and Thai Beverage 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 Thai Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Thai Beverage.

Diversification Opportunities for United Natural and Thai Beverage

0.0

Correlation Coefficient

United Natural  Thai Beverage

Pay attention - limited upside

The 3 months correlation between United and Thai is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and Thai Beverage PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Beverage PCL 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 Thai Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Beverage PCL has no effect on the direction of United Natural i.e., United Natural and Thai Beverage go up and down completely randomly.

Pair Corralation between United Natural and Thai Beverage

Given the investment horizon of 90 days United Natural Foods is expected to generate 1.95 times more return on investment than Thai Beverage. However, United Natural is 1.95 times more volatile than Thai Beverage PCL. It trades about 0.0 of its potential returns per unit of risk. Thai Beverage PCL is currently generating about -0.06 per unit of risk. If you would invest  3,999  in United Natural Foods on October 11, 2024 and sell it today you would lose (1,114) from holding United Natural Foods or give up 27.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	60.48%
Values	Daily Returns

United Natural Foods  vs.  Thai Beverage PCL

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 fairly fragile technical and fundamental indicators, United Natural demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Thai Beverage PCL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thai Beverage PCL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Thai Beverage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with United Natural and Thai Beverage

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

The idea behind United Natural Foods and Thai Beverage PCL 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..