Correlation Between Fresh Del and Unified Series

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

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

Diversification Opportunities for Fresh Del and Unified Series

0.32

Correlation Coefficient

Fresh Del  Unified Series

Weak diversification

The 3 months correlation between Fresh and Unified is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Fresh Del Monte and Unified Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unified Series Trust and Fresh Del 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 Fresh Del Monte are associated (or correlated) with Unified Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unified Series Trust has no effect on the direction of Fresh Del i.e., Fresh Del and Unified Series go up and down completely randomly.

Pair Corralation between Fresh Del and Unified Series

Considering the 90-day investment horizon Fresh Del Monte is expected to generate 1.47 times more return on investment than Unified Series. However, Fresh Del is 1.47 times more volatile than Unified Series Trust. It trades about 0.11 of its potential returns per unit of risk. Unified Series Trust is currently generating about -0.01 per unit of risk. If you would invest  2,367  in Fresh Del Monte on January 19, 2024 and sell it today you would earn a total of  117.00  from holding Fresh Del Monte or generate 4.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Fresh Del Monte  vs.  Unified Series Trust

Fresh Del Monte

Risk-Adjusted Performance

0 of 100

Very Weak

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

Unified Series Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unified Series Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound essential indicators, Unified Series is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Fresh Del and Unified Series

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

The idea behind Fresh Del Monte and Unified Series Trust 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.