Correlation Between Aures Technologies and Ubisoft Entertainment

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

By analyzing existing cross correlation between Aures Technologies SA and Ubisoft Entertainment, you can compare the effects of market volatilities on Aures Technologies and Ubisoft Entertainment 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 Aures Technologies with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aures Technologies and Ubisoft Entertainment.

Diversification Opportunities for Aures Technologies and Ubisoft Entertainment

-0.1

Correlation Coefficient

Aures Technologies  Ubisoft Entertainment

Good diversification

The 3 months correlation between Aures and Ubisoft is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aures Technologies SA and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Aures Technologies 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 Aures Technologies SA are associated (or correlated) with Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Aures Technologies i.e., Aures Technologies and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between Aures Technologies and Ubisoft Entertainment

Assuming the 90 days trading horizon Aures Technologies SA is expected to generate 0.06 times more return on investment than Ubisoft Entertainment. However, Aures Technologies SA is 16.03 times less risky than Ubisoft Entertainment. It trades about 0.04 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.01 per unit of risk. If you would invest  623.00  in Aures Technologies SA on December 22, 2024 and sell it today you would earn a total of  3.00  from holding Aures Technologies SA or generate 0.48% return on investment over 90 days.

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

Aures Technologies SA  vs.  Ubisoft Entertainment

Aures Technologies

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Aures Technologies SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Aures Technologies is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Ubisoft Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ubisoft Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Ubisoft Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aures Technologies and Ubisoft Entertainment

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

The idea behind Aures Technologies SA and Ubisoft 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.