Correlation Between Crescent Steel and Unity Foods

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

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

Diversification Opportunities for Crescent Steel and Unity Foods

-0.51

Correlation Coefficient

Crescent Steel  Unity Foods

Excellent diversification

The 3 months correlation between Crescent and Unity is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Steel Allied and Unity Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Foods and Crescent Steel 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 Crescent Steel Allied are associated (or correlated) with Unity Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Foods has no effect on the direction of Crescent Steel i.e., Crescent Steel and Unity Foods go up and down completely randomly.

Pair Corralation between Crescent Steel and Unity Foods

Assuming the 90 days trading horizon Crescent Steel Allied is expected to under-perform the Unity Foods. But the stock apears to be less risky and, when comparing its historical volatility, Crescent Steel Allied is 1.04 times less risky than Unity Foods. The stock trades about -0.1 of its potential returns per unit of risk. The Unity Foods is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,643  in Unity Foods on May 28, 2025 and sell it today you would earn a total of  348.00  from holding Unity Foods or generate 13.17% return on investment over 90 days.

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

Crescent Steel Allied  vs.  Unity Foods

Crescent Steel Allied

Risk-Adjusted Performance

Weakest

Over the last 90 days Crescent Steel Allied has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Unity Foods

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Unity Foods disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Crescent Steel and Unity Foods

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

The idea behind Crescent Steel Allied and Unity 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.