Correlation Between Ubisoft Entertainment and Nexon Co
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and Nexon Co 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 Nexon Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubisoft Entertainment and Nexon Co Ltd, you can compare the effects of market volatilities on Ubisoft Entertainment and Nexon Co 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 Nexon Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and Nexon Co.
Diversification Opportunities for Ubisoft Entertainment and Nexon Co
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ubisoft and Nexon is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment and Nexon Co Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexon Co 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 Nexon Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexon Co has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and Nexon Co go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and Nexon Co
Assuming the 90 days horizon Ubisoft Entertainment is expected to generate 0.66 times more return on investment than Nexon Co. However, Ubisoft Entertainment is 1.53 times less risky than Nexon Co. It trades about -0.23 of its potential returns per unit of risk. Nexon Co Ltd is currently generating about -0.3 per unit of risk. If you would invest 1,485 in Ubisoft Entertainment on September 1, 2024 and sell it today you would lose (167.00) from holding Ubisoft Entertainment or give up 11.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubisoft Entertainment vs. Nexon Co Ltd
Performance |
| Timeline |
| Ubisoft Entertainment |
| Nexon Co |
Ubisoft Entertainment and Nexon Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and Nexon Co
The main advantage of trading using opposite Ubisoft Entertainment and Nexon Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, Nexon Co 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 Nexon Co will offset losses from the drop in Nexon Co's long position.| Ubisoft Entertainment vs. CD Projekt SA | Ubisoft Entertainment vs. Sega Sammy Holdings | Ubisoft Entertainment vs. Playtika Holding Corp | Ubisoft Entertainment vs. Square Enix Holdings |
| Nexon Co vs. i3 Interactive | Nexon Co vs. Sega Sammy Holdings | Nexon Co vs. Square Enix Holdings | Nexon Co vs. Nintendo Co |
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.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |