Correlation Between Unity Software and Booz Allen

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

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

Diversification Opportunities for Unity Software and Booz Allen

-0.23

Correlation Coefficient

Unity Software  Booz Allen

Very good diversification

The 3 months correlation between Unity and Booz is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Booz Allen Hamilton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Booz Allen Hamilton 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 Booz Allen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Booz Allen Hamilton has no effect on the direction of Unity Software i.e., Unity Software and Booz Allen go up and down completely randomly.

Pair Corralation between Unity Software and Booz Allen

Taking into account the 90-day investment horizon Unity Software is expected to generate 1.58 times more return on investment than Booz Allen. However, Unity Software is 1.58 times more volatile than Booz Allen Hamilton. It trades about 0.16 of its potential returns per unit of risk. Booz Allen Hamilton is currently generating about -0.05 per unit of risk. If you would invest  2,184  in Unity Software on May 10, 2025 and sell it today you would earn a total of  1,008  from holding Unity Software or generate 46.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Unity Software  vs.  Booz Allen Hamilton

Unity Software

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 12 (%) 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.

Booz Allen Hamilton

Risk-Adjusted Performance

Weakest

Over the last 90 days Booz Allen Hamilton has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Unity Software and Booz Allen

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

The idea behind Unity Software and Booz Allen Hamilton 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.