Correlation Between XAC Automation and Unic Technology

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

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

Diversification Opportunities for XAC Automation and Unic Technology

0.73

Correlation Coefficient

XAC Automation  Unic Technology

Poor diversification

The 3 months correlation between XAC and Unic is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding XAC Automation and Unic Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unic Technology and XAC Automation 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 XAC Automation 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 XAC Automation i.e., XAC Automation and Unic Technology go up and down completely randomly.

Pair Corralation between XAC Automation and Unic Technology

Assuming the 90 days trading horizon XAC Automation is expected to generate 0.94 times more return on investment than Unic Technology. However, XAC Automation is 1.06 times less risky than Unic Technology. It trades about -0.1 of its potential returns per unit of risk. Unic Technology is currently generating about -0.21 per unit of risk. If you would invest  2,590  in XAC Automation on October 24, 2024 and sell it today you would lose (365.00) from holding XAC Automation or give up 14.09% of portfolio value over 90 days.

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

XAC Automation  vs.  Unic Technology

XAC Automation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days XAC Automation 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.

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 XAC Automation and Unic Technology

The main advantage of trading using opposite XAC Automation and Unic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAC Automation 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 XAC Automation 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.