Correlation Between Northern Data and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Northern Data 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 Northern Data and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Northern Data AG and Ubisoft Entertainment SA, you can compare the effects of market volatilities on Northern Data 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 Northern Data with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Data and Ubisoft Entertainment.
Diversification Opportunities for Northern Data and Ubisoft Entertainment
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Northern and Ubisoft is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Northern Data AG and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Northern Data 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 Northern Data 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 Northern Data i.e., Northern Data and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Northern Data and Ubisoft Entertainment
Assuming the 90 days trading horizon Northern Data AG is expected to generate 2.69 times more return on investment than Ubisoft Entertainment. However, Northern Data is 2.69 times more volatile than Ubisoft Entertainment SA. It trades about 0.21 of its potential returns per unit of risk. Ubisoft Entertainment SA is currently generating about 0.07 per unit of risk. If you would invest 4,165 in Northern Data AG on October 12, 2024 and sell it today you would earn a total of 675.00 from holding Northern Data AG or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northern Data AG vs. Ubisoft Entertainment SA
Performance |
| Timeline |
| Northern Data AG |
| Ubisoft Entertainment |
Northern Data and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northern Data and Ubisoft Entertainment
The main advantage of trading using opposite Northern Data and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northern Data 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.| Northern Data vs. RELIANCE STEEL AL | Northern Data vs. NEW MILLENNIUM IRON | Northern Data vs. VELA TECHNOLPLC LS 0001 | Northern Data vs. STEEL DYNAMICS |
| 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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