Correlation Between Ehang Holdings and Unifirst

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

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

Diversification Opportunities for Ehang Holdings and Unifirst

-0.37

Correlation Coefficient

Ehang Holdings  Unifirst

Very good diversification

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

Pair Corralation between Ehang Holdings and Unifirst

Allowing for the 90-day total investment horizon Ehang Holdings is expected to under-perform the Unifirst. In addition to that, Ehang Holdings is 1.62 times more volatile than Unifirst. It trades about -0.05 of its total potential returns per unit of risk. Unifirst is currently generating about -0.05 per unit of volatility. If you would invest  18,117  in Unifirst on May 6, 2025 and sell it today you would lose (1,147) from holding Unifirst or give up 6.33% of portfolio value over 90 days.

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

Ehang Holdings  vs.  Unifirst

Ehang Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ehang Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Unifirst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unifirst has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Unifirst is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ehang Holdings and Unifirst

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

The idea behind Ehang Holdings and Unifirst 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.