Correlation Between LION ONE and Ubisoft Entertainment

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

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

Diversification Opportunities for LION ONE and Ubisoft Entertainment

0.22

Correlation Coefficient

LION ONE  Ubisoft Entertainment

Modest diversification

The 3 months correlation between LION and Ubisoft is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and LION ONE 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 LION ONE METALS 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 LION ONE i.e., LION ONE and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between LION ONE and Ubisoft Entertainment

Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the Ubisoft Entertainment. In addition to that, LION ONE is 1.89 times more volatile than Ubisoft Entertainment SA. It trades about -0.17 of its total potential returns per unit of risk. Ubisoft Entertainment SA is currently generating about 0.05 per unit of volatility. If you would invest  1,248  in Ubisoft Entertainment SA on September 30, 2024 and sell it today you would earn a total of  29.00  from holding Ubisoft Entertainment SA or generate 2.32% return on investment over 90 days.

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

LION ONE METALS  vs.  Ubisoft Entertainment SA

LION ONE METALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LION ONE METALS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ubisoft Entertainment

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ubisoft Entertainment SA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ubisoft Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with LION ONE and Ubisoft Entertainment

The main advantage of trading using opposite LION ONE and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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 LION ONE METALS 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.