Correlation Between Ubisoft Entertainment and EXPEDIA

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

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

Diversification Opportunities for Ubisoft Entertainment and EXPEDIA

0.24

Correlation Coefficient

Ubisoft Entertainment  EXPEDIA

Modest diversification

The 3 months correlation between Ubisoft and EXPEDIA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment and EXPEDIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXPEDIA GROUP INC 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 EXPEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXPEDIA GROUP INC has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and EXPEDIA go up and down completely randomly.

Pair Corralation between Ubisoft Entertainment and EXPEDIA

Assuming the 90 days horizon Ubisoft Entertainment is expected to under-perform the EXPEDIA. In addition to that, Ubisoft Entertainment is 8.97 times more volatile than EXPEDIA GROUP INC. It trades about -0.09 of its total potential returns per unit of risk. EXPEDIA GROUP INC is currently generating about -0.01 per unit of volatility. If you would invest  9,981  in EXPEDIA GROUP INC on October 25, 2024 and sell it today you would lose (27.00) from holding EXPEDIA GROUP INC or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Ubisoft Entertainment  vs.  EXPEDIA GROUP INC

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 uncertain performance in the last few months, the Stock's technical and fundamental 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.

EXPEDIA GROUP INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXPEDIA GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPEDIA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ubisoft Entertainment and EXPEDIA

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

The idea behind Ubisoft Entertainment and EXPEDIA GROUP INC 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.