Correlation Between Albany International and Unifi

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

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

Diversification Opportunities for Albany International and Unifi

0.03

Correlation Coefficient

Albany International  Unifi

Significant diversification

The 3 months correlation between Albany and Unifi is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Albany International and Unifi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifi Inc and Albany 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 Albany International are associated (or correlated) with Unifi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unifi Inc has no effect on the direction of Albany International i.e., Albany International and Unifi go up and down completely randomly.

Pair Corralation between Albany International and Unifi

Considering the 90-day investment horizon Albany International is expected to under-perform the Unifi. But the stock apears to be less risky and, when comparing its historical volatility, Albany International is 1.61 times less risky than Unifi. The stock trades about 0.0 of its potential returns per unit of risk. The Unifi Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  638.00  in Unifi Inc on December 3, 2024 and sell it today you would lose (97.00) from holding Unifi Inc or give up 15.2% of portfolio value over 90 days.

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

Albany International  vs.  Unifi Inc

Albany International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Albany International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Unifi Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unifi Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Unifi is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Albany International and Unifi

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

The idea behind Albany International and Unifi Inc 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.