Correlation Between Unity Software and Credit Acceptance
Can any of the company-specific risk be diversified away by investing in both Unity Software and Credit Acceptance 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 Credit Acceptance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unity Software and Credit Acceptance, you can compare the effects of market volatilities on Unity Software and Credit Acceptance 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 Credit Acceptance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unity Software and Credit Acceptance.
Diversification Opportunities for Unity Software and Credit Acceptance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Unity and Credit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Credit Acceptance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Credit Acceptance 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 Credit Acceptance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Credit Acceptance has no effect on the direction of Unity Software i.e., Unity Software and Credit Acceptance go up and down completely randomly.
Pair Corralation between Unity Software and Credit Acceptance
Assuming the 90 days trading horizon Unity Software is expected to generate 8.66 times less return on investment than Credit Acceptance. In addition to that, Unity Software is 2.25 times more volatile than Credit Acceptance. It trades about 0.0 of its total potential returns per unit of risk. Credit Acceptance is currently generating about 0.03 per unit of volatility. If you would invest 25,800 in Credit Acceptance on August 24, 2024 and sell it today you would earn a total of 6,700 from holding Credit Acceptance or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.8% |
| Values | Daily Returns |
Unity Software vs. Credit Acceptance
Performance |
| Timeline |
| Unity Software |
| Credit Acceptance |
Unity Software and Credit Acceptance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unity Software and Credit Acceptance
The main advantage of trading using opposite Unity Software and Credit Acceptance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity Software position performs unexpectedly, Credit Acceptance 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 Credit Acceptance will offset losses from the drop in Credit Acceptance's long position.| Unity Software vs. Uber Technologies | Unity Software vs. The Trade Desk | Unity Software vs. Zoom Video Communications |
| Credit Acceptance vs. Capital One Financial | Credit Acceptance vs. Bread Financial Holdings | Credit Acceptance vs. Fras le SA | Credit Acceptance vs. Clave Indices De |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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