Correlation Between Unitronics and PCB Tec

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

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

Diversification Opportunities for Unitronics and PCB Tec

0.4

Correlation Coefficient

Unitronics  PCB Tec

Very weak diversification

The 3 months correlation between Unitronics and PCB is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Unitronics and PCB Tec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PCB Tec and Unitronics 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 Unitronics are associated (or correlated) with PCB Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PCB Tec has no effect on the direction of Unitronics i.e., Unitronics and PCB Tec go up and down completely randomly.

Pair Corralation between Unitronics and PCB Tec

Assuming the 90 days trading horizon Unitronics is expected to under-perform the PCB Tec. But the stock apears to be less risky and, when comparing its historical volatility, Unitronics is 1.96 times less risky than PCB Tec. The stock trades about -0.06 of its potential returns per unit of risk. The PCB Tec is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  85,147  in PCB Tec on April 23, 2025 and sell it today you would earn a total of  29,553  from holding PCB Tec or generate 34.71% return on investment over 90 days.

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

Unitronics  vs.  PCB Tec

Unitronics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Unitronics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

PCB Tec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PCB Tec are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, PCB Tec sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unitronics and PCB Tec

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

The idea behind Unitronics and PCB Tec 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.