The Is Sky and Unlit are correct for a skybox material.
If you don’t need clouds painted onto the skybox (when using volume clouds for instance), the most basic sky material would look something like this:
Sky disc luminance 0 being the sun, and light direction 1 at the left side being the moon. Swap the 0 and 1 in the index boxes if your directional lights are the other way around.
Then, to make stars only show at night, make sure you’re using a dynamic material instance of this on the sky sphere, and have whatever blueprint is controlling the light rotation set the value on the Star Brightness parameter.