Correlation Between Ubisoft Entertainment and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and FuelCell Energy 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 FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubisoft Entertainment and FuelCell Energy, you can compare the effects of market volatilities on Ubisoft Entertainment and FuelCell Energy 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 FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and FuelCell Energy.
Diversification Opportunities for Ubisoft Entertainment and FuelCell Energy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ubisoft and FuelCell is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy 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 FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and FuelCell Energy go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and FuelCell Energy
Assuming the 90 days trading horizon Ubisoft Entertainment is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, Ubisoft Entertainment is 4.35 times less risky than FuelCell Energy. The stock trades about -0.17 of its potential returns per unit of risk. The FuelCell Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,101 in FuelCell Energy on October 11, 2024 and sell it today you would earn a total of 80.00 from holding FuelCell Energy or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ubisoft Entertainment vs. FuelCell Energy
Performance |
| Timeline |
| Ubisoft Entertainment |
| FuelCell Energy |
Ubisoft Entertainment and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and FuelCell Energy
The main advantage of trading using opposite Ubisoft Entertainment and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| Ubisoft Entertainment vs. Ecclesiastical Insurance Office | Ubisoft Entertainment vs. Beazer Homes USA | Ubisoft Entertainment vs. Science in Sport | Ubisoft Entertainment vs. Fresenius Medical Care |
| FuelCell Energy vs. Ubisoft Entertainment | FuelCell Energy vs. Liberty Media Corp | FuelCell Energy vs. Flutter Entertainment PLC | FuelCell Energy vs. Dalata Hotel Group |
Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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