Correlation Between TrueBlue and Unifirst

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

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

Diversification Opportunities for TrueBlue and Unifirst

-0.28

Correlation Coefficient

TrueBlue  Unifirst

Very good diversification

The 3 months correlation between TrueBlue and Unifirst is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding TrueBlue and Unifirst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unifirst and TrueBlue 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 TrueBlue 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 TrueBlue i.e., TrueBlue and Unifirst go up and down completely randomly.

Pair Corralation between TrueBlue and Unifirst

Considering the 90-day investment horizon TrueBlue is expected to generate 2.49 times more return on investment than Unifirst. However, TrueBlue is 2.49 times more volatile than Unifirst. It trades about 0.2 of its potential returns per unit of risk. Unifirst is currently generating about -0.03 per unit of risk. If you would invest  384.00  in TrueBlue on May 6, 2025 and sell it today you would earn a total of  250.00  from holding TrueBlue or generate 65.1% return on investment over 90 days.

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

TrueBlue  vs.  Unifirst

TrueBlue

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TrueBlue are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady fundamental drivers, TrueBlue demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 TrueBlue and Unifirst

The main advantage of trading using opposite TrueBlue and Unifirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrueBlue 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 TrueBlue 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.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.