Correlation Between Unity Software and Waldencast Acquisition

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

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

Diversification Opportunities for Unity Software and Waldencast Acquisition

-0.64

Correlation Coefficient

Unity Software  Waldencast Acquisition

Excellent diversification

The 3 months correlation between Unity and Waldencast is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Waldencast Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waldencast Acquisition 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 Waldencast Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waldencast Acquisition has no effect on the direction of Unity Software i.e., Unity Software and Waldencast Acquisition go up and down completely randomly.

Pair Corralation between Unity Software and Waldencast Acquisition

Assuming the 90 days trading horizon Unity Software is expected to generate 0.81 times more return on investment than Waldencast Acquisition. However, Unity Software is 1.24 times less risky than Waldencast Acquisition. It trades about 0.24 of its potential returns per unit of risk. Waldencast Acquisition Corp is currently generating about -0.05 per unit of risk. If you would invest  653.00  in Unity Software on July 1, 2025 and sell it today you would earn a total of  486.00  from holding Unity Software or generate 74.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

Unity Software  vs.  Waldencast Acquisition Corp

Unity Software

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Unity Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Waldencast Acquisition

Risk-Adjusted Performance

Weakest

Over the last 90 days Waldencast Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in October 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Unity Software and Waldencast Acquisition

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

The idea behind Unity Software and Waldencast Acquisition Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.