Correlation Between Lendlease and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Ubisoft Entertainment SA, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Ubisoft Entertainment.
Diversification Opportunities for Lendlease and Ubisoft Entertainment
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lendlease and Ubisoft is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Lendlease 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 Lendlease Group 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 Lendlease i.e., Lendlease and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Lendlease and Ubisoft Entertainment
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.57 times more return on investment than Ubisoft Entertainment. However, Lendlease Group is 1.74 times less risky than Ubisoft Entertainment. It trades about 0.03 of its potential returns per unit of risk. Ubisoft Entertainment SA is currently generating about -0.06 per unit of risk. If you would invest 394.00 in Lendlease Group on September 4, 2024 and sell it today you would earn a total of 43.00 from holding Lendlease Group or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Ubisoft Entertainment SA
Performance |
| Timeline |
| Lendlease Group |
| Ubisoft Entertainment |
Lendlease and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Ubisoft Entertainment
The main advantage of trading using opposite Lendlease and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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 Lendlease Group and Ubisoft Entertainment SA 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.| Ubisoft Entertainment vs. VULCAN MATERIALS | Ubisoft Entertainment vs. Compagnie Plastic Omnium | Ubisoft Entertainment vs. GOODYEAR T RUBBER | Ubisoft Entertainment vs. Lendlease 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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