Correlation Between Unity Foods and Hi Tech

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

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

Diversification Opportunities for Unity Foods and Hi Tech

0.08

Correlation Coefficient

Unity Foods  Hi Tech

Significant diversification

The 3 months correlation between Unity and HTL is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Unity Foods and Hi Tech Lubricants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hi Tech Lubricants and Unity Foods 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 Unity Foods are associated (or correlated) with Hi Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hi Tech Lubricants has no effect on the direction of Unity Foods i.e., Unity Foods and Hi Tech go up and down completely randomly.

Pair Corralation between Unity Foods and Hi Tech

Assuming the 90 days trading horizon Unity Foods is expected to generate 1.2 times less return on investment than Hi Tech. But when comparing it to its historical volatility, Unity Foods is 1.01 times less risky than Hi Tech. It trades about 0.07 of its potential returns per unit of risk. Hi Tech Lubricants is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,989  in Hi Tech Lubricants on May 25, 2025 and sell it today you would earn a total of  513.00  from holding Hi Tech Lubricants or generate 12.86% return on investment over 90 days.

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

Unity Foods  vs.  Hi Tech Lubricants

Unity Foods

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Unity Foods may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Hi Tech Lubricants

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Hi Tech Lubricants are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Hi Tech reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unity Foods and Hi Tech

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

The idea behind Unity Foods and Hi Tech Lubricants 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.