Correlation Between Lendway and Unity Software

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

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

Diversification Opportunities for Lendway and Unity Software

0.25

Correlation Coefficient

Lendway  Unity Software

Modest diversification

The 3 months correlation between Lendway and Unity is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lendway and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity Software and Lendway 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 Lendway are associated (or correlated) with Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of Lendway i.e., Lendway and Unity Software go up and down completely randomly.

Pair Corralation between Lendway and Unity Software

Given the investment horizon of 90 days Lendway is expected to generate 1.73 times less return on investment than Unity Software. But when comparing it to its historical volatility, Lendway is 1.35 times less risky than Unity Software. It trades about 0.01 of its potential returns per unit of risk. Unity Software is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,592  in Unity Software on July 21, 2025 and sell it today you would lose (68.00) from holding Unity Software or give up 1.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Lendway  vs.  Unity Software

Lendway

Risk-Adjusted Performance

Weakest

Over the last 90 days Lendway has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Lendway is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Unity Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Unity Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Unity Software is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Lendway and Unity Software

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

The idea behind Lendway and Unity Software 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.