Correlation Between Univest Pennsylvania and Alliance Entertainment

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

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

Diversification Opportunities for Univest Pennsylvania and Alliance Entertainment

-0.01

Correlation Coefficient

Univest Pennsylvania  Alliance Entertainment

Good diversification

The 3 months correlation between Univest and Alliance is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Univest Pennsylvania and Alliance Entertainment Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Entertainment and Univest Pennsylvania 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 Univest Pennsylvania are associated (or correlated) with Alliance Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Entertainment has no effect on the direction of Univest Pennsylvania i.e., Univest Pennsylvania and Alliance Entertainment go up and down completely randomly.

Pair Corralation between Univest Pennsylvania and Alliance Entertainment

Given the investment horizon of 90 days Univest Pennsylvania is expected to generate 0.18 times more return on investment than Alliance Entertainment. However, Univest Pennsylvania is 5.66 times less risky than Alliance Entertainment. It trades about -0.02 of its potential returns per unit of risk. Alliance Entertainment Holding is currently generating about -0.14 per unit of risk. If you would invest  2,942  in Univest Pennsylvania on December 29, 2024 and sell it today you would lose (77.00) from holding Univest Pennsylvania or give up 2.62% of portfolio value over 90 days.

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

Univest Pennsylvania  vs.  Alliance Entertainment Holding

Univest Pennsylvania

Risk-Adjusted Performance

Very Weak

Over the last 90 days Univest Pennsylvania has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Univest Pennsylvania is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Alliance Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alliance Entertainment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting 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 Univest Pennsylvania and Alliance Entertainment

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

The idea behind Univest Pennsylvania and Alliance Entertainment 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.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.