Correlation Between United Natural and OPERA SOFTWARE

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

Diversification Opportunities for United Natural and OPERA SOFTWARE

-0.42
  Correlation Coefficient

Very good diversification

The 3 months correlation between United and OPERA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and OPERA SOFTWARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OPERA SOFTWARE 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 OPERA SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OPERA SOFTWARE has no effect on the direction of United Natural i.e., United Natural and OPERA SOFTWARE go up and down completely randomly.

Pair Corralation between United Natural and OPERA SOFTWARE

Assuming the 90 days horizon United Natural is expected to generate 5.06 times less return on investment than OPERA SOFTWARE. In addition to that, United Natural is 1.93 times more volatile than OPERA SOFTWARE. It trades about 0.03 of its total potential returns per unit of risk. OPERA SOFTWARE is currently generating about 0.32 per unit of volatility. If you would invest  74.00  in OPERA SOFTWARE on April 24, 2025 and sell it today you would earn a total of  40.00  from holding OPERA SOFTWARE or generate 54.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

United Natural Foods  vs.  OPERA SOFTWARE

 Performance 
       Timeline  
United Natural Foods 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in United Natural Foods are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, United Natural may actually be approaching a critical reversion point that can send shares even higher in August 2025.
OPERA SOFTWARE 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in OPERA SOFTWARE are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, OPERA SOFTWARE unveiled solid returns over the last few months and may actually be approaching a breakup point.

United Natural and OPERA SOFTWARE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Natural and OPERA SOFTWARE

The main advantage of trading using opposite United Natural and OPERA SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural position performs unexpectedly, OPERA SOFTWARE 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 OPERA SOFTWARE will offset losses from the drop in OPERA SOFTWARE's long position.
The idea behind United Natural Foods and OPERA SOFTWARE 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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