Correlation Between Canterbury Park and Unico American

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

By analyzing existing cross correlation between Canterbury Park Holding and Unico American, you can compare the effects of market volatilities on Canterbury Park and Unico American 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 Canterbury Park with a short position of Unico American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canterbury Park and Unico American.

Diversification Opportunities for Canterbury Park and Unico American

0.41

Correlation Coefficient

Canterbury Park  Unico American

Very weak diversification

The 3 months correlation between Canterbury and Unico is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Canterbury Park Holding and Unico American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unico American and Canterbury Park 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 Canterbury Park Holding are associated (or correlated) with Unico American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unico American has no effect on the direction of Canterbury Park i.e., Canterbury Park and Unico American go up and down completely randomly.

Pair Corralation between Canterbury Park and Unico American

Given the investment horizon of 90 days Canterbury Park is expected to generate 12.85 times less return on investment than Unico American. But when comparing it to its historical volatility, Canterbury Park Holding is 1.87 times less risky than Unico American. It trades about 0.05 of its potential returns per unit of risk. Unico American is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  5.70  in Unico American on October 11, 2024 and sell it today you would earn a total of  2.41  from holding Unico American or generate 42.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Canterbury Park Holding  vs.  Unico American

Canterbury Park Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canterbury Park Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Canterbury Park exhibited solid returns over the last few months and may actually be approaching a breakup point.

Unico American

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unico American are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Unico American displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Canterbury Park and Unico American

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

The idea behind Canterbury Park Holding and Unico American 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..