Correlation Between Unity Software and PTC

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

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

Diversification Opportunities for Unity Software and PTC

0.85

Correlation Coefficient

Unity Software  PTC

Very poor diversification

The 3 months correlation between Unity and PTC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and PTC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PTC Inc 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 PTC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PTC Inc has no effect on the direction of Unity Software i.e., Unity Software and PTC go up and down completely randomly.

Pair Corralation between Unity Software and PTC

Taking into account the 90-day investment horizon Unity Software is expected to generate 1.51 times more return on investment than PTC. However, Unity Software is 1.51 times more volatile than PTC Inc. It trades about 0.24 of its potential returns per unit of risk. PTC Inc is currently generating about 0.19 per unit of risk. If you would invest  2,095  in Unity Software on April 23, 2025 and sell it today you would earn a total of  1,580  from holding Unity Software or generate 75.42% return on investment over 90 days.

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

Unity Software  vs.  PTC Inc

Unity Software

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 18 (%) 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.

PTC Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PTC Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, PTC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unity Software and PTC

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

The idea behind Unity Software and PTC Inc 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.