Correlation Between Unity Software and Mitek Systems

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

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

Diversification Opportunities for Unity Software and Mitek Systems

-0.34

Correlation Coefficient

Unity Software  Mitek Systems

Very good diversification

The 3 months correlation between Unity and Mitek is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Mitek Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitek Systems 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 Mitek Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitek Systems has no effect on the direction of Unity Software i.e., Unity Software and Mitek Systems go up and down completely randomly.

Pair Corralation between Unity Software and Mitek Systems

Taking into account the 90-day investment horizon Unity Software is expected to generate 2.25 times more return on investment than Mitek Systems. However, Unity Software is 2.25 times more volatile than Mitek Systems. It trades about 0.21 of its potential returns per unit of risk. Mitek Systems is currently generating about 0.01 per unit of risk. If you would invest  2,281  in Unity Software on May 16, 2025 and sell it today you would earn a total of  1,513  from holding Unity Software or generate 66.33% 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.  Mitek Systems

Unity Software

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 16 (%) 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.

Mitek Systems

Risk-Adjusted Performance

Weakest

Over the last 90 days Mitek Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Mitek Systems is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Unity Software and Mitek Systems

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

The idea behind Unity Software and Mitek Systems 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.