Correlation Between Bitcoin and Ubisoft Entertainment

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

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

Diversification Opportunities for Bitcoin and Ubisoft Entertainment

-0.7

Correlation Coefficient

Bitcoin  Ubisoft Entertainment

Excellent diversification

The 3 months correlation between Bitcoin and Ubisoft is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Bitcoin and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Bitcoin 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 Bitcoin 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 Bitcoin i.e., Bitcoin and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between Bitcoin and Ubisoft Entertainment

Assuming the 90 days trading horizon Bitcoin is expected to generate 2.65 times more return on investment than Ubisoft Entertainment. However, Bitcoin is 2.65 times more volatile than Ubisoft Entertainment. It trades about 0.09 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.03 per unit of risk. If you would invest  2,333,210  in Bitcoin on October 25, 2024 and sell it today you would earn a total of  8,026,690  from holding Bitcoin or generate 344.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	59.16%
Values	Daily Returns

Bitcoin  vs.  Ubisoft Entertainment

Bitcoin

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bitcoin are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bitcoin exhibited solid returns over the last few months and may actually be approaching a breakup point.

Ubisoft Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ubisoft Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bitcoin and Ubisoft Entertainment

The main advantage of trading using opposite Bitcoin and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bitcoin 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 Bitcoin 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.