Correlation Between Unitronics and Fridenson

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

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

Diversification Opportunities for Unitronics and Fridenson

0.04

Correlation Coefficient

Unitronics  Fridenson

Significant diversification

The 3 months correlation between Unitronics and Fridenson is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Unitronics and Fridenson in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fridenson 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 Fridenson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fridenson has no effect on the direction of Unitronics i.e., Unitronics and Fridenson go up and down completely randomly.

Pair Corralation between Unitronics and Fridenson

Assuming the 90 days trading horizon Unitronics is expected to generate 2.01 times less return on investment than Fridenson. But when comparing it to its historical volatility, Unitronics is 1.41 times less risky than Fridenson. It trades about 0.03 of its potential returns per unit of risk. Fridenson is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  469,711  in Fridenson on April 24, 2025 and sell it today you would earn a total of  135,289  from holding Fridenson or generate 28.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.74%
Values	Daily Returns

Unitronics  vs.  Fridenson

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.

Fridenson

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fridenson are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fridenson may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Unitronics and Fridenson

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

The idea behind Unitronics and Fridenson 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.