Correlation Between Airtac International and Uniform Industrial

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

By analyzing existing cross correlation between Airtac International Group and Uniform Industrial Corp, you can compare the effects of market volatilities on Airtac International and Uniform Industrial 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 Airtac International with a short position of Uniform Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Airtac International and Uniform Industrial.

Diversification Opportunities for Airtac International and Uniform Industrial

0.69

Correlation Coefficient

Airtac International  Uniform Industrial

Poor diversification

The 3 months correlation between Airtac and Uniform is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Airtac International Group and Uniform Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniform Industrial Corp and Airtac International 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 Airtac International Group are associated (or correlated) with Uniform Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniform Industrial Corp has no effect on the direction of Airtac International i.e., Airtac International and Uniform Industrial go up and down completely randomly.

Pair Corralation between Airtac International and Uniform Industrial

Assuming the 90 days trading horizon Airtac International Group is expected to under-perform the Uniform Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Airtac International Group is 1.35 times less risky than Uniform Industrial. The stock trades about 0.0 of its potential returns per unit of risk. The Uniform Industrial Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  2,725  in Uniform Industrial Corp on September 29, 2024 and sell it today you would earn a total of  5.00  from holding Uniform Industrial Corp or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Airtac International Group  vs.  Uniform Industrial Corp

Airtac International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Airtac International Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Uniform Industrial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniform Industrial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Airtac International and Uniform Industrial

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

The idea behind Airtac International Group and Uniform Industrial Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.