Correlation Between Kontoor Brands and Unifi
Can any of the company-specific risk be diversified away by investing in both Kontoor Brands 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 Kontoor Brands and Unifi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kontoor Brands and Unifi Inc, you can compare the effects of market volatilities on Kontoor Brands 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 Kontoor Brands with a short position of Unifi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kontoor Brands and Unifi.
Diversification Opportunities for Kontoor Brands and Unifi
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Kontoor and Unifi is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kontoor Brands and Unifi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifi Inc and Kontoor Brands 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 Kontoor Brands 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 Kontoor Brands i.e., Kontoor Brands and Unifi go up and down completely randomly.
Pair Corralation between Kontoor Brands and Unifi
Considering the 90-day investment horizon Kontoor Brands is expected to under-perform the Unifi. But the stock apears to be less risky and, when comparing its historical volatility, Kontoor Brands is 2.72 times less risky than Unifi. The stock trades about -0.07 of its potential returns per unit of risk. The Unifi Inc is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 552.00 in Unifi Inc on October 21, 2024 and sell it today you would earn a total of 74.00 from holding Unifi Inc or generate 13.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Kontoor Brands vs. Unifi Inc
Performance |
Timeline |
Kontoor Brands |
Unifi Inc |
Kontoor Brands and Unifi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kontoor Brands and Unifi
The main advantage of trading using opposite Kontoor Brands and Unifi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kontoor Brands 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.Kontoor Brands vs. Vince Holding Corp | Kontoor Brands vs. Ermenegildo Zegna NV | Kontoor Brands vs. Columbia Sportswear | Kontoor Brands vs. Gildan Activewear |
Unifi vs. Albany International | Unifi vs. Toray Industries | Unifi vs. Culp Inc | Unifi vs. Toray Industries ADR |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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