Correlation Between Unity Software and Kvika Banki

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

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

Diversification Opportunities for Unity Software and Kvika Banki

-0.56

Correlation Coefficient

Unity Software  Kvika Banki

Excellent diversification

The 3 months correlation between Unity and Kvika is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Kvika banki hf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kvika banki hf 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 Kvika Banki. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kvika banki hf has no effect on the direction of Unity Software i.e., Unity Software and Kvika Banki go up and down completely randomly.

Pair Corralation between Unity Software and Kvika Banki

Taking into account the 90-day investment horizon Unity Software is expected to generate 5.32 times more return on investment than Kvika Banki. However, Unity Software is 5.32 times more volatile than Kvika banki hf. It trades about 0.04 of its potential returns per unit of risk. Kvika banki hf is currently generating about 0.1 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	Very Weak
Accuracy	100.0%
Values	Daily Returns

Unity Software  vs.  Kvika banki hf

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.

Kvika banki hf

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kvika banki hf are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Kvika Banki is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Unity Software and Kvika Banki

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

The idea behind Unity Software and Kvika banki hf 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.