Correlation Between Loads and Unity Foods

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

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

Diversification Opportunities for Loads and Unity Foods

0.75

Correlation Coefficient

Loads  Unity Foods

Poor diversification

The 3 months correlation between Loads and Unity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Loads and Unity Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Foods and Loads 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 Loads 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 Loads i.e., Loads and Unity Foods go up and down completely randomly.

Pair Corralation between Loads and Unity Foods

Assuming the 90 days trading horizon Loads is expected to generate 1.16 times less return on investment than Unity Foods. But when comparing it to its historical volatility, Loads is 1.08 times less risky than Unity Foods. It trades about 0.08 of its potential returns per unit of risk. 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 Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Loads  vs.  Unity Foods

Loads

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Loads are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Loads disclosed solid returns over the last few months and may actually be approaching a breakup point.

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 Loads and Unity Foods

The main advantage of trading using opposite Loads and Unity Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loads 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 Loads 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.