Correlation Between Unified Series and Aston Martin

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

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

Diversification Opportunities for Unified Series and Aston Martin

-0.37

Correlation Coefficient

Unified Series  Aston Martin

Very good diversification

The 3 months correlation between Unified and Aston is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Unified Series Trust and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda and Unified Series 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 Unified Series Trust are associated (or correlated) with Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of Unified Series i.e., Unified Series and Aston Martin go up and down completely randomly.

Pair Corralation between Unified Series and Aston Martin

Given the investment horizon of 90 days Unified Series Trust is expected to generate 0.34 times more return on investment than Aston Martin. However, Unified Series Trust is 2.96 times less risky than Aston Martin. It trades about -0.18 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.23 per unit of risk. If you would invest  2,706  in Unified Series Trust on January 26, 2024 and sell it today you would lose (79.00) from holding Unified Series Trust or give up 2.92% of portfolio value over 90 days.

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

Unified Series Trust  vs.  Aston Martin Lagonda

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Aston Martin Lagonda

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aston Martin Lagonda 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 Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Unified Series and Aston Martin

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

The idea behind Unified Series Trust and Aston Martin Lagonda 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.