Correlation Between Unifirst and Trustcash Holdings
Can any of the company-specific risk be diversified away by investing in both Unifirst and Trustcash Holdings 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 Unifirst and Trustcash Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unifirst and Trustcash Holdings, you can compare the effects of market volatilities on Unifirst and Trustcash Holdings 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 Unifirst with a short position of Trustcash Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifirst and Trustcash Holdings.
Diversification Opportunities for Unifirst and Trustcash Holdings
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Unifirst and Trustcash is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Unifirst and Trustcash Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trustcash Holdings and Unifirst 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 Unifirst are associated (or correlated) with Trustcash Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trustcash Holdings has no effect on the direction of Unifirst i.e., Unifirst and Trustcash Holdings go up and down completely randomly.
Pair Corralation between Unifirst and Trustcash Holdings
Considering the 90-day investment horizon Unifirst is expected to generate 0.29 times more return on investment than Trustcash Holdings. However, Unifirst is 3.39 times less risky than Trustcash Holdings. It trades about 0.04 of its potential returns per unit of risk. Trustcash Holdings is currently generating about -0.06 per unit of risk. If you would invest 17,128 in Unifirst on August 26, 2024 and sell it today you would earn a total of 2,895 from holding Unifirst or generate 16.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Unifirst vs. Trustcash Holdings
Performance |
| Timeline |
| Unifirst |
| Trustcash Holdings |
Unifirst and Trustcash Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unifirst and Trustcash Holdings
The main advantage of trading using opposite Unifirst and Trustcash Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifirst position performs unexpectedly, Trustcash Holdings 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 Trustcash Holdings will offset losses from the drop in Trustcash Holdings' long position.| Unifirst vs. Park Electrochemical | Unifirst vs. Innovative Solutions and | Unifirst vs. Curtiss Wright | Unifirst vs. National Presto Industries |
| Trustcash Holdings vs. Park Electrochemical | Trustcash Holdings vs. Innovative Solutions and | Trustcash Holdings vs. Curtiss Wright | Trustcash Holdings vs. National Presto Industries |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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