Correlation Between Ubisoft Entertainment and Whitbread Plc
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and Whitbread Plc 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 Whitbread Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubisoft Entertainment and Whitbread plc, you can compare the effects of market volatilities on Ubisoft Entertainment and Whitbread Plc 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 Whitbread Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and Whitbread Plc.
Diversification Opportunities for Ubisoft Entertainment and Whitbread Plc
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ubisoft and Whitbread is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment and Whitbread plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread plc 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 Whitbread Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread plc has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and Whitbread Plc go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and Whitbread Plc
Assuming the 90 days horizon Ubisoft Entertainment is expected to under-perform the Whitbread Plc. In addition to that, Ubisoft Entertainment is 2.6 times more volatile than Whitbread plc. It trades about -0.07 of its total potential returns per unit of risk. Whitbread plc is currently generating about -0.01 per unit of volatility. If you would invest 3,751 in Whitbread plc on November 2, 2024 and sell it today you would lose (155.00) from holding Whitbread plc or give up 4.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubisoft Entertainment vs. Whitbread plc
Performance |
| Timeline |
| Ubisoft Entertainment |
| Whitbread plc |
Ubisoft Entertainment and Whitbread Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and Whitbread Plc
The main advantage of trading using opposite Ubisoft Entertainment and Whitbread Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, Whitbread Plc 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 Whitbread Plc will offset losses from the drop in Whitbread Plc's long position.| Ubisoft Entertainment vs. Capcom Co Ltd | Ubisoft Entertainment vs. CD Projekt SA | Ubisoft Entertainment vs. Sega Sammy Holdings | Ubisoft Entertainment vs. Playtika Holding Corp |
| Whitbread Plc vs. Marriott International | Whitbread Plc vs. Hilton Worldwide Holdings | Whitbread Plc vs. InterContinental Hotels Group | Whitbread Plc vs. Accor SA |
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 Stocks Directory module to find actively traded stocks across global markets.
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