Correlation Between Unity Software and Live Nation

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

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

Diversification Opportunities for Unity Software and Live Nation

0.33

Correlation Coefficient

Unity Software  Live Nation

Weak diversification

The 3 months correlation between Unity and Live is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of Unity Software i.e., Unity Software and Live Nation go up and down completely randomly.

Pair Corralation between Unity Software and Live Nation

Assuming the 90 days horizon Unity Software is expected to generate 2.54 times more return on investment than Live Nation. However, Unity Software is 2.54 times more volatile than Live Nation Entertainment. It trades about 0.15 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.01 per unit of risk. If you would invest  1,928  in Unity Software on May 14, 2025 and sell it today you would earn a total of  927.00  from holding Unity Software or generate 48.08% return on investment over 90 days.

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

Unity Software  vs.  Live Nation Entertainment

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. Despite nearly fragile basic indicators, Unity Software reported solid returns over the last few months and may actually be approaching a breakup point.

Live Nation Entertainment

Risk-Adjusted Performance

Weakest

Over the last 90 days Live Nation Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Live Nation is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Unity Software and Live Nation

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

The idea behind Unity Software and Live Nation Entertainment 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.