Correlation Between Integrated Media and Ubisoft Entertainment

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

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

Diversification Opportunities for Integrated Media and Ubisoft Entertainment

0.4

Correlation Coefficient

Integrated Media  Ubisoft Entertainment

Very weak diversification

The 3 months correlation between Integrated and Ubisoft is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Integrated Media Technology and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Integrated Media 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 Integrated Media Technology are associated (or correlated) with Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Integrated Media i.e., Integrated Media and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between Integrated Media and Ubisoft Entertainment

Given the investment horizon of 90 days Integrated Media Technology is expected to generate 4.48 times more return on investment than Ubisoft Entertainment. However, Integrated Media is 4.48 times more volatile than Ubisoft Entertainment. It trades about 0.06 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about 0.23 per unit of risk. If you would invest  231.00  in Integrated Media Technology on January 30, 2024 and sell it today you would earn a total of  8.00  from holding Integrated Media Technology or generate 3.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Integrated Media Technology  vs.  Ubisoft Entertainment

Integrated Media Tec

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Media Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Integrated Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Ubisoft Entertainment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ubisoft Entertainment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Ubisoft Entertainment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Integrated Media and Ubisoft Entertainment

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

The idea behind Integrated Media Technology and Ubisoft Entertainment 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.