Correlation Between AVY Precision and Unic Technology

Can any of the company-specific risk be diversified away by investing in both AVY Precision and Unic Technology 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 AVY Precision and Unic Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AVY Precision Technology and Unic Technology, you can compare the effects of market volatilities on AVY Precision and Unic Technology 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 AVY Precision with a short position of Unic Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVY Precision and Unic Technology.

Diversification Opportunities for AVY Precision and Unic Technology

-0.35

Correlation Coefficient

AVY Precision  Unic Technology

Very good diversification

The 3 months correlation between AVY and Unic is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AVY Precision Technology and Unic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unic Technology and AVY Precision 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 AVY Precision Technology are associated (or correlated) with Unic Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unic Technology has no effect on the direction of AVY Precision i.e., AVY Precision and Unic Technology go up and down completely randomly.

Pair Corralation between AVY Precision and Unic Technology

Assuming the 90 days trading horizon AVY Precision Technology is expected to generate 1.48 times more return on investment than Unic Technology. However, AVY Precision is 1.48 times more volatile than Unic Technology. It trades about 0.03 of its potential returns per unit of risk. Unic Technology is currently generating about -0.21 per unit of risk. If you would invest  3,240  in AVY Precision Technology on October 24, 2024 and sell it today you would earn a total of  125.00  from holding AVY Precision Technology or generate 3.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

AVY Precision Technology  vs.  Unic Technology

AVY Precision Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AVY Precision Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AVY Precision may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Unic Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unic Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with AVY Precision and Unic Technology

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

The idea behind AVY Precision Technology and Unic Technology 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.