Correlation Between National Presto and Unifirst
Can any of the company-specific risk be diversified away by investing in both National Presto and Unifirst 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 National Presto and Unifirst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Presto Industries and Unifirst, you can compare the effects of market volatilities on National Presto and Unifirst 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 National Presto with a short position of Unifirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Presto and Unifirst.
Diversification Opportunities for National Presto and Unifirst
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Unifirst is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Presto Industries and Unifirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifirst and National Presto 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 National Presto Industries are associated (or correlated) with Unifirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifirst has no effect on the direction of National Presto i.e., National Presto and Unifirst go up and down completely randomly.
Pair Corralation between National Presto and Unifirst
Considering the 90-day investment horizon National Presto Industries is expected to generate 0.83 times more return on investment than Unifirst. However, National Presto Industries is 1.2 times less risky than Unifirst. It trades about 0.03 of its potential returns per unit of risk. Unifirst is currently generating about 0.02 per unit of risk. If you would invest 6,594 in National Presto Industries on August 30, 2024 and sell it today you would earn a total of 1,264 from holding National Presto Industries or generate 19.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
National Presto Industries vs. Unifirst
Performance |
| Timeline |
| National Presto Indu |
| Unifirst |
National Presto and Unifirst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Presto and Unifirst
The main advantage of trading using opposite National Presto and Unifirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Presto position performs unexpectedly, Unifirst 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 Unifirst will offset losses from the drop in Unifirst's long position.| National Presto vs. Park Electrochemical | National Presto vs. Ducommun Incorporated | National Presto vs. Innovative Solutions and | National Presto vs. VSE Corporation |
| Unifirst vs. AZZ Incorporated | Unifirst vs. BrightView Holdings | Unifirst vs. Maximus | Unifirst vs. Network 1 Technologies |
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 Stocks Directory module to find actively traded stocks across global markets.
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