Correlation Between Ubisoft Entertainment and CeoTronics

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

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

Diversification Opportunities for Ubisoft Entertainment and CeoTronics

-0.15

Correlation Coefficient

Ubisoft Entertainment  CeoTronics

Good diversification

The 3 months correlation between Ubisoft and CeoTronics is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 SA are associated (or correlated) with CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and CeoTronics go up and down completely randomly.

Pair Corralation between Ubisoft Entertainment and CeoTronics

Assuming the 90 days horizon Ubisoft Entertainment SA is expected to under-perform the CeoTronics. In addition to that, Ubisoft Entertainment is 1.38 times more volatile than CeoTronics AG. It trades about -0.03 of its total potential returns per unit of risk. CeoTronics AG is currently generating about 0.04 per unit of volatility. If you would invest  414.00  in CeoTronics AG on September 24, 2024 and sell it today you would earn a total of  171.00  from holding CeoTronics AG or generate 41.3% return on investment over 90 days.

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

Ubisoft Entertainment SA  vs.  CeoTronics AG

Ubisoft Entertainment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ubisoft Entertainment SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ubisoft Entertainment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CeoTronics AG

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CeoTronics AG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward-looking signals, CeoTronics unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ubisoft Entertainment and CeoTronics

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

The idea behind Ubisoft Entertainment SA and CeoTronics AG 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.