Correlation Between Commerzbank and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Commerzbank 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 Commerzbank and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commerzbank AG and Ubisoft Entertainment, you can compare the effects of market volatilities on Commerzbank 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 Commerzbank with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commerzbank and Ubisoft Entertainment.
Diversification Opportunities for Commerzbank and Ubisoft Entertainment
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commerzbank and Ubisoft is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Commerzbank AG and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Commerzbank 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 Commerzbank AG 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 Commerzbank i.e., Commerzbank and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Commerzbank and Ubisoft Entertainment
Assuming the 90 days trading horizon Commerzbank AG is expected to generate 0.44 times more return on investment than Ubisoft Entertainment. However, Commerzbank AG is 2.26 times less risky than Ubisoft Entertainment. It trades about 0.73 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about -0.23 per unit of risk. If you would invest 1,550 in Commerzbank AG on November 3, 2024 and sell it today you would earn a total of 313.00 from holding Commerzbank AG or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commerzbank AG vs. Ubisoft Entertainment
Performance |
| Timeline |
| Commerzbank AG |
| Ubisoft Entertainment |
Commerzbank and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commerzbank and Ubisoft Entertainment
The main advantage of trading using opposite Commerzbank and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commerzbank 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.| Commerzbank vs. Samsung Electronics Co | Commerzbank vs. Samsung Electronics Co | Commerzbank vs. Toyota Motor Corp | Commerzbank vs. Reliance Industries Ltd |
| Ubisoft Entertainment vs. Air Products Chemicals | Ubisoft Entertainment vs. Alliance Data Systems | Ubisoft Entertainment vs. Made Tech Group | Ubisoft Entertainment vs. Extra Space Storage |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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