Correlation Between SilverSun Technologies and Unum

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

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

Diversification Opportunities for SilverSun Technologies and Unum

-0.33

Correlation Coefficient

SilverSun Technologies  Unum

Very good diversification

The 3 months correlation between SilverSun and Unum is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SilverSun Technologies and Unum Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unum Group and SilverSun Technologies 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 SilverSun Technologies are associated (or correlated) with Unum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unum Group has no effect on the direction of SilverSun Technologies i.e., SilverSun Technologies and Unum go up and down completely randomly.

Pair Corralation between SilverSun Technologies and Unum

Given the investment horizon of 90 days SilverSun Technologies is expected to generate 4.15 times more return on investment than Unum. However, SilverSun Technologies is 4.15 times more volatile than Unum Group. It trades about 0.01 of its potential returns per unit of risk. Unum Group is currently generating about -0.09 per unit of risk. If you would invest  1,303  in SilverSun Technologies on January 25, 2024 and sell it today you would lose (11.00) from holding SilverSun Technologies or give up 0.84% of portfolio value over 90 days.

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

SilverSun Technologies  vs.  Unum Group

SilverSun Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SilverSun Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SilverSun Technologies is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Unum Group

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unum Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Unum may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with SilverSun Technologies and Unum

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

The idea behind SilverSun Technologies and Unum Group 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.