Correlation Between Kemper and Unico American

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

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

Diversification Opportunities for Kemper and Unico American

-0.33

Correlation Coefficient

Kemper  Unico American

Very good diversification

The 3 months correlation between Kemper and Unico is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kemper and Unico American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unico American and Kemper 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 Kemper 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 Kemper i.e., Kemper and Unico American go up and down completely randomly.

Pair Corralation between Kemper and Unico American

Given the investment horizon of 90 days Kemper is expected to generate 98.32 times less return on investment than Unico American. But when comparing it to its historical volatility, Kemper is 22.86 times less risky than Unico American. It trades about 0.02 of its potential returns per unit of risk. Unico American is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  124.00  in Unico American on October 25, 2024 and sell it today you would lose (115.89) from holding Unico American or give up 93.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Kemper  vs.  Unico American

Kemper

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kemper are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Kemper is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Unico American

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Unico American has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very weak basic indicators, Unico American displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kemper and Unico American

The main advantage of trading using opposite Kemper and Unico American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kemper 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 Kemper 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.