Correlation Between Unifirst and System1

Can any of the company-specific risk be diversified away by investing in both Unifirst and System1 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 Unifirst and System1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Unifirst and System1, you can compare the effects of market volatilities on Unifirst and System1 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 Unifirst with a short position of System1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unifirst and System1.

Diversification Opportunities for Unifirst and System1

-0.13

Correlation Coefficient

Unifirst  System1

Good diversification

The 3 months correlation between Unifirst and System1 is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Unifirst and System1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on System1 and Unifirst 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 Unifirst are associated (or correlated) with System1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of System1 has no effect on the direction of Unifirst i.e., Unifirst and System1 go up and down completely randomly.

Pair Corralation between Unifirst and System1

Considering the 90-day investment horizon Unifirst is expected to generate 0.49 times more return on investment than System1. However, Unifirst is 2.05 times less risky than System1. It trades about 0.03 of its potential returns per unit of risk. System1 is currently generating about -0.11 per unit of risk. If you would invest  17,071  in Unifirst on December 29, 2024 and sell it today you would earn a total of  319.00  from holding Unifirst or generate 1.87% return on investment over 90 days.

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

Unifirst  vs.  System1

Unifirst

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unifirst are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Unifirst is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

System1

Risk-Adjusted Performance

Very Weak

Over the last 90 days System1 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the exchange-traded fund private investors.

Pair Trading with Unifirst and System1

The main advantage of trading using opposite Unifirst and System1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unifirst position performs unexpectedly, System1 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 System1 will offset losses from the drop in System1's long position.

The idea behind Unifirst and System1 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..