Correlation Between Bilibili and UbiSoft Entertainment

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

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

Diversification Opportunities for Bilibili and UbiSoft Entertainment

0.51

Correlation Coefficient

Bilibili  UbiSoft Entertainment

Very weak diversification

The 3 months correlation between Bilibili and UbiSoft is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bilibili and UbiSoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UbiSoft Entertainment and Bilibili 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 Bilibili 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 Bilibili i.e., Bilibili and UbiSoft Entertainment go up and down completely randomly.

Pair Corralation between Bilibili and UbiSoft Entertainment

Given the investment horizon of 90 days Bilibili is expected to generate 1.01 times more return on investment than UbiSoft Entertainment. However, Bilibili is 1.01 times more volatile than UbiSoft Entertainment. It trades about 0.04 of its potential returns per unit of risk. UbiSoft Entertainment is currently generating about 0.02 per unit of risk. If you would invest  1,840  in Bilibili on December 30, 2024 and sell it today you would earn a total of  82.00  from holding Bilibili or generate 4.46% return on investment over 90 days.

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

Bilibili  vs.  UbiSoft Entertainment

Bilibili

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Bilibili may actually be approaching a critical reversion point that can send shares even higher in April 2025.

UbiSoft Entertainment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in UbiSoft Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental 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 Bilibili and UbiSoft Entertainment

The main advantage of trading using opposite Bilibili and UbiSoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bilibili 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 Bilibili 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.