Correlation Between Nexxen International and UbiSoft Entertainment

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

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

Diversification Opportunities for Nexxen International and UbiSoft Entertainment

-0.8

Correlation Coefficient

Nexxen International  UbiSoft Entertainment

Pay attention - limited upside

The 3 months correlation between Nexxen and UbiSoft is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nexxen International and UbiSoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UbiSoft Entertainment and Nexxen International 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 Nexxen International 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 Nexxen International i.e., Nexxen International and UbiSoft Entertainment go up and down completely randomly.

Pair Corralation between Nexxen International and UbiSoft Entertainment

Given the investment horizon of 90 days Nexxen International is expected to generate 2.26 times less return on investment than UbiSoft Entertainment. But when comparing it to its historical volatility, Nexxen International is 1.71 times less risky than UbiSoft Entertainment. It trades about 0.08 of its potential returns per unit of risk. UbiSoft Entertainment is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  244.00  in UbiSoft Entertainment on October 6, 2024 and sell it today you would earn a total of  16.00  from holding UbiSoft Entertainment or generate 6.56% return on investment over 90 days.

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

Nexxen International  vs.  UbiSoft Entertainment

Nexxen International

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nexxen International are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Nexxen International displayed 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. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Nexxen International and UbiSoft Entertainment

The main advantage of trading using opposite Nexxen International and UbiSoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexxen International 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 Nexxen International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.