Correlation Between Unitronix and ALUF Holdings

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

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

Diversification Opportunities for Unitronix and ALUF Holdings

-0.66

Correlation Coefficient

Unitronix  ALUF Holdings

Excellent diversification

The 3 months correlation between Unitronix and ALUF is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Unitronix and ALUF Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALUF Holdings and Unitronix 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 Unitronix are associated (or correlated) with ALUF Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALUF Holdings has no effect on the direction of Unitronix i.e., Unitronix and ALUF Holdings go up and down completely randomly.

Pair Corralation between Unitronix and ALUF Holdings

Given the investment horizon of 90 days Unitronix is expected to generate 2.98 times more return on investment than ALUF Holdings. However, Unitronix is 2.98 times more volatile than ALUF Holdings. It trades about 0.18 of its potential returns per unit of risk. ALUF Holdings is currently generating about -0.01 per unit of risk. If you would invest  1.69  in Unitronix on May 17, 2025 and sell it today you would earn a total of  9.31  from holding Unitronix or generate 550.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Unitronix  vs.  ALUF Holdings

Unitronix

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unitronix are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Unitronix showed solid returns over the last few months and may actually be approaching a breakup point.

ALUF Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days ALUF Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, ALUF Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Unitronix and ALUF Holdings

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

The idea behind Unitronix and ALUF Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.