Correlation Between Eagle Materials and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Eagle Materials 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 Eagle Materials and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Materials and Ubisoft Entertainment SA, you can compare the effects of market volatilities on Eagle Materials 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 Eagle Materials with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Materials and Ubisoft Entertainment.
Diversification Opportunities for Eagle Materials and Ubisoft Entertainment
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Eagle and Ubisoft is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Materials and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Eagle Materials 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 Eagle Materials 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 Eagle Materials i.e., Eagle Materials and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Eagle Materials and Ubisoft Entertainment
Assuming the 90 days horizon Eagle Materials is expected to under-perform the Ubisoft Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Eagle Materials is 1.43 times less risky than Ubisoft Entertainment. The stock trades about -0.52 of its potential returns per unit of risk. The Ubisoft Entertainment SA is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,328 in Ubisoft Entertainment SA on October 11, 2024 and sell it today you would lose (33.00) from holding Ubisoft Entertainment SA or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eagle Materials vs. Ubisoft Entertainment SA
Performance |
| Timeline |
| Eagle Materials |
| Ubisoft Entertainment |
Eagle Materials and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Materials and Ubisoft Entertainment
The main advantage of trading using opposite Eagle Materials and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Materials 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.| Eagle Materials vs. SEI INVESTMENTS | Eagle Materials vs. SCIENCE IN SPORT | Eagle Materials vs. CHRYSALIS INVESTMENTS LTD | Eagle Materials vs. Keck Seng Investments |
| Ubisoft Entertainment vs. Gaztransport Technigaz SA | Ubisoft Entertainment vs. APPLIED MATERIALS | Ubisoft Entertainment vs. Eagle Materials | Ubisoft Entertainment vs. NTG Nordic Transport |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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