Correlation Between Unico American and Canterbury Park

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

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

Diversification Opportunities for Unico American and Canterbury Park

0.29

Correlation Coefficient

Unico American  Canterbury Park

Modest diversification

The 3 months correlation between Unico and Canterbury is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Unico American and Canterbury Park Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canterbury Park Holding and Unico American 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 Unico American are associated (or correlated) with Canterbury Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canterbury Park Holding has no effect on the direction of Unico American i.e., Unico American and Canterbury Park go up and down completely randomly.

Pair Corralation between Unico American and Canterbury Park

Given the investment horizon of 90 days Unico American is expected to generate 3.0 times more return on investment than Canterbury Park. However, Unico American is 3.0 times more volatile than Canterbury Park Holding. It trades about 0.3 of its potential returns per unit of risk. Canterbury Park Holding is currently generating about -0.14 per unit of risk. If you would invest  5.80  in Unico American on October 26, 2024 and sell it today you would earn a total of  2.31  from holding Unico American or generate 39.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Unico American  vs.  Canterbury Park Holding

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.

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 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Unico American and Canterbury Park

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

The idea behind Unico American and Canterbury Park Holding 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.