Correlation Between Unity Software and XinJiang GuoTong

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

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

Diversification Opportunities for Unity Software and XinJiang GuoTong

-0.08

Correlation Coefficient

Unity Software  XinJiang GuoTong

Good diversification

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

Pair Corralation between Unity Software and XinJiang GuoTong

Taking into account the 90-day investment horizon Unity Software is expected to generate 1.94 times less return on investment than XinJiang GuoTong. In addition to that, Unity Software is 1.94 times more volatile than XinJiang GuoTong Pipeline. It trades about 0.01 of its total potential returns per unit of risk. XinJiang GuoTong Pipeline is currently generating about 0.05 per unit of volatility. If you would invest  869.00  in XinJiang GuoTong Pipeline on December 29, 2024 and sell it today you would earn a total of  53.00  from holding XinJiang GuoTong Pipeline or generate 6.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Unity Software  vs.  XinJiang GuoTong Pipeline

Unity Software

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Unity Software is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

XinJiang GuoTong Pipeline

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in XinJiang GuoTong Pipeline are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, XinJiang GuoTong may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unity Software and XinJiang GuoTong

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

The idea behind Unity Software and XinJiang GuoTong Pipeline 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.