Correlation Between Unity Software and Industrivarden

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

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

Diversification Opportunities for Unity Software and Industrivarden

-0.03

Correlation Coefficient

Unity Software  Industrivarden

Good diversification

The 3 months correlation between Unity and Industrivarden is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Industrivarden AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrivarden AB ser 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 Industrivarden. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrivarden AB ser has no effect on the direction of Unity Software i.e., Unity Software and Industrivarden go up and down completely randomly.

Pair Corralation between Unity Software and Industrivarden

Taking into account the 90-day investment horizon Unity Software is expected to generate 5.52 times more return on investment than Industrivarden. However, Unity Software is 5.52 times more volatile than Industrivarden AB ser. It trades about 0.04 of its potential returns per unit of risk. Industrivarden AB ser is currently generating about 0.19 per unit of risk. If you would invest  2,425  in Unity Software on December 2, 2024 and sell it today you would earn a total of  139.00  from holding Unity Software or generate 5.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Unity Software  vs.  Industrivarden AB ser

Unity Software

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Unity Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

Industrivarden AB ser

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Industrivarden AB ser are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Industrivarden may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Unity Software and Industrivarden

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

The idea behind Unity Software and Industrivarden AB ser 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.