Correlation Between Ubisoft Entertainment and DHI

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

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

Diversification Opportunities for Ubisoft Entertainment and DHI

-0.83

Correlation Coefficient

Ubisoft Entertainment  DHI

Pay attention - limited upside

The 3 months correlation between Ubisoft and DHI is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group and Ubisoft Entertainment 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 Ubisoft Entertainment are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and DHI go up and down completely randomly.

Pair Corralation between Ubisoft Entertainment and DHI

Assuming the 90 days horizon Ubisoft Entertainment is expected to generate 0.63 times more return on investment than DHI. However, Ubisoft Entertainment is 1.6 times less risky than DHI. It trades about 0.07 of its potential returns per unit of risk. DHI Group is currently generating about 0.0 per unit of risk. If you would invest  1,300  in Ubisoft Entertainment on December 18, 2024 and sell it today you would earn a total of  141.00  from holding Ubisoft Entertainment or generate 10.85% return on investment over 90 days.

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

Ubisoft Entertainment  vs.  DHI Group

Ubisoft Entertainment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ubisoft Entertainment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Ubisoft Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

DHI Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days DHI Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, DHI is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ubisoft Entertainment and DHI

The main advantage of trading using opposite Ubisoft Entertainment and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.

The idea behind Ubisoft Entertainment and DHI Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.