Correlation Between Gateway Real and Ubisoft Entertainment

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

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

Diversification Opportunities for Gateway Real and Ubisoft Entertainment

-0.14

Correlation Coefficient

Gateway Real  Ubisoft Entertainment

Good diversification

The 3 months correlation between Gateway and Ubisoft is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Real Estate and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Gateway Real 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 Gateway Real Estate 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 Gateway Real i.e., Gateway Real and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between Gateway Real and Ubisoft Entertainment

Assuming the 90 days trading horizon Gateway Real Estate is expected to generate 9.34 times more return on investment than Ubisoft Entertainment. However, Gateway Real is 9.34 times more volatile than Ubisoft Entertainment SA. It trades about 0.08 of its potential returns per unit of risk. Ubisoft Entertainment SA is currently generating about -0.09 per unit of risk. If you would invest  85.00  in Gateway Real Estate on October 26, 2024 and sell it today you would earn a total of  14.00  from holding Gateway Real Estate or generate 16.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Gateway Real Estate  vs.  Ubisoft Entertainment SA

Gateway Real Estate

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gateway Real Estate are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Gateway Real unveiled 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 SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Gateway Real and Ubisoft Entertainment

The main advantage of trading using opposite Gateway Real and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Real 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 Gateway Real Estate and Ubisoft Entertainment SA 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.