Correlation Between Ubisoft Entertainment and Flutter Entertainment

Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and Flutter 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 Ubisoft Entertainment and Flutter Entertainment 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 Flutter Entertainment PLC, you can compare the effects of market volatilities on Ubisoft Entertainment and Flutter 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 Ubisoft Entertainment with a short position of Flutter Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and Flutter Entertainment.

Diversification Opportunities for Ubisoft Entertainment and Flutter Entertainment

-0.74

Correlation Coefficient

Ubisoft Entertainment  Flutter Entertainment

Pay attention - limited upside

The 3 months correlation between Ubisoft and Flutter is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and Flutter Entertainment PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flutter Entertainment PLC 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 Flutter Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flutter Entertainment PLC has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and Flutter Entertainment go up and down completely randomly.

Pair Corralation between Ubisoft Entertainment and Flutter Entertainment

Assuming the 90 days horizon Ubisoft Entertainment SA is expected to generate 1.67 times more return on investment than Flutter Entertainment. However, Ubisoft Entertainment is 1.67 times more volatile than Flutter Entertainment PLC. It trades about 0.0 of its potential returns per unit of risk. Flutter Entertainment PLC is currently generating about -0.09 per unit of risk. If you would invest  1,285  in Ubisoft Entertainment SA on December 30, 2024 and sell it today you would lose (52.00) from holding Ubisoft Entertainment SA or give up 4.05% of portfolio value over 90 days.

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

Ubisoft Entertainment SA  vs.  Flutter Entertainment PLC

Ubisoft Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ubisoft Entertainment SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ubisoft Entertainment is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Flutter Entertainment PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flutter Entertainment PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Ubisoft Entertainment and Flutter Entertainment

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

The idea behind Ubisoft Entertainment SA and Flutter Entertainment PLC 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.