Correlation Between UbiSoft Entertainment and Citigroup

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Can any of the company-specific risk be diversified away by investing in both UbiSoft Entertainment and Citigroup 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 Citigroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UbiSoft Entertainment and Citigroup, you can compare the effects of market volatilities on UbiSoft Entertainment and Citigroup 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 Citigroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of UbiSoft Entertainment and Citigroup.

Diversification Opportunities for UbiSoft Entertainment and Citigroup

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between UbiSoft and Citigroup is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding UbiSoft Entertainment and Citigroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citigroup 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 Citigroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citigroup has no effect on the direction of UbiSoft Entertainment i.e., UbiSoft Entertainment and Citigroup go up and down completely randomly.

Pair Corralation between UbiSoft Entertainment and Citigroup

Assuming the 90 days horizon UbiSoft Entertainment is expected to under-perform the Citigroup. In addition to that, UbiSoft Entertainment is 2.14 times more volatile than Citigroup. It trades about -0.04 of its total potential returns per unit of risk. Citigroup is currently generating about 0.08 per unit of volatility. If you would invest  4,458  in Citigroup on October 4, 2024 and sell it today you would earn a total of  2,546  from holding Citigroup or generate 57.11% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy99.73%
ValuesDaily Returns

UbiSoft Entertainment  vs.  Citigroup

 Performance 
       Timeline  
UbiSoft Entertainment 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
Citigroup 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

UbiSoft Entertainment and Citigroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with UbiSoft Entertainment and Citigroup

The main advantage of trading using opposite UbiSoft Entertainment and Citigroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UbiSoft Entertainment position performs unexpectedly, Citigroup 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 Citigroup will offset losses from the drop in Citigroup's long position.
The idea behind UbiSoft Entertainment and Citigroup 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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