Correlation Between Cadiz and UNITIL
Can any of the company-specific risk be diversified away by investing in both Cadiz and UNITIL 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 Cadiz and UNITIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cadiz Inc and UNITIL, you can compare the effects of market volatilities on Cadiz and UNITIL 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 Cadiz with a short position of UNITIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cadiz and UNITIL.
Diversification Opportunities for Cadiz and UNITIL
Poor diversification
The 3 months correlation between Cadiz and UNITIL is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Cadiz Inc and UNITIL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITIL and Cadiz 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 Cadiz Inc are associated (or correlated) with UNITIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITIL has no effect on the direction of Cadiz i.e., Cadiz and UNITIL go up and down completely randomly.
Pair Corralation between Cadiz and UNITIL
Given the investment horizon of 90 days Cadiz Inc is expected to generate 4.15 times more return on investment than UNITIL. However, Cadiz is 4.15 times more volatile than UNITIL. It trades about 0.16 of its potential returns per unit of risk. UNITIL is currently generating about 0.15 per unit of risk. If you would invest 354.00 in Cadiz Inc on September 3, 2025 and sell it today you would earn a total of 169.00 from holding Cadiz Inc or generate 47.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cadiz Inc vs. UNITIL
Performance |
| Timeline |
| Cadiz Inc |
| UNITIL |
Cadiz and UNITIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cadiz and UNITIL
The main advantage of trading using opposite Cadiz and UNITIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadiz position performs unexpectedly, UNITIL 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 UNITIL will offset losses from the drop in UNITIL's long position.| Cadiz vs. Global Net Lease | Cadiz vs. Prism Software | Cadiz vs. United Rentals | Cadiz vs. Take Two Interactive Software |
| UNITIL vs. Cleanaway Waste Management | UNITIL vs. Northstar Clean Technologies | UNITIL vs. Delaware Investments Florida | UNITIL vs. MGIC Investment Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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