Correlation Between Unity Software and Cal-Maine Foods

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

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

Diversification Opportunities for Unity Software and Cal-Maine Foods

-0.12

Correlation Coefficient

Unity Software  Cal-Maine Foods

Good diversification

The 3 months correlation between Unity and Cal-Maine is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Cal Maine Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cal Maine Foods and Unity Software 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 Unity Software are associated (or correlated) with Cal-Maine Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cal Maine Foods has no effect on the direction of Unity Software i.e., Unity Software and Cal-Maine Foods go up and down completely randomly.

Pair Corralation between Unity Software and Cal-Maine Foods

Assuming the 90 days horizon Unity Software is expected to generate 1.57 times more return on investment than Cal-Maine Foods. However, Unity Software is 1.57 times more volatile than Cal Maine Foods. It trades about 0.0 of its potential returns per unit of risk. Cal Maine Foods is currently generating about -0.12 per unit of risk. If you would invest  2,138  in Unity Software on December 19, 2024 and sell it today you would lose (187.00) from holding Unity Software or give up 8.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Unity Software  vs.  Cal Maine Foods

Unity Software

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unity Software has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Unity Software is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cal Maine Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cal Maine Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock'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 firm private investors.

Pair Trading with Unity Software and Cal-Maine Foods

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

The idea behind Unity Software and Cal Maine Foods 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.