Correlation Between Unity Software and FIBI Holdings

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

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

Diversification Opportunities for Unity Software and FIBI Holdings

0.02

Correlation Coefficient

Unity Software  FIBI Holdings

Significant diversification

The 3 months correlation between Unity and FIBI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and FIBI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIBI Holdings 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 FIBI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIBI Holdings has no effect on the direction of Unity Software i.e., Unity Software and FIBI Holdings go up and down completely randomly.

Pair Corralation between Unity Software and FIBI Holdings

Taking into account the 90-day investment horizon Unity Software is expected to generate 1.3 times less return on investment than FIBI Holdings. In addition to that, Unity Software is 4.85 times more volatile than FIBI Holdings. It trades about 0.02 of its total potential returns per unit of risk. FIBI Holdings is currently generating about 0.1 per unit of volatility. If you would invest  1,836,000  in FIBI Holdings on December 27, 2024 and sell it today you would earn a total of  103,000  from holding FIBI Holdings or generate 5.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	85.0%
Values	Daily Returns

Unity Software  vs.  FIBI Holdings

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.

FIBI Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FIBI Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, FIBI Holdings may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unity Software and FIBI Holdings

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

The idea behind Unity Software and FIBI 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.