Correlation Between Ubisoft Entertainment and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and Scandinavian Tobacco 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 Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubisoft Entertainment SA and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Ubisoft Entertainment and Scandinavian Tobacco 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 Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and Scandinavian Tobacco.
Diversification Opportunities for Ubisoft Entertainment and Scandinavian Tobacco
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ubisoft and Scandinavian is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco 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 SA are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and Scandinavian Tobacco
Assuming the 90 days horizon Ubisoft Entertainment SA is expected to under-perform the Scandinavian Tobacco. In addition to that, Ubisoft Entertainment is 2.42 times more volatile than Scandinavian Tobacco Group. It trades about -0.2 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.15 per unit of volatility. If you would invest 1,310 in Scandinavian Tobacco Group on November 8, 2024 and sell it today you would earn a total of 52.00 from holding Scandinavian Tobacco Group or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubisoft Entertainment SA vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Ubisoft Entertainment |
| Scandinavian Tobacco |
Ubisoft Entertainment and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and Scandinavian Tobacco
The main advantage of trading using opposite Ubisoft Entertainment and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| Ubisoft Entertainment vs. Ares Management Corp | Ubisoft Entertainment vs. RCI Hospitality Holdings | Ubisoft Entertainment vs. ecotel communication ag | Ubisoft Entertainment vs. Highlight Communications AG |
| Scandinavian Tobacco vs. OPKO HEALTH | Scandinavian Tobacco vs. Tyson Foods | Scandinavian Tobacco vs. Lifeway Foods | Scandinavian Tobacco vs. Planet Fitness |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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