Correlation Between Ubisoft Entertainment and China Reinsurance
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and China Reinsurance 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 China Reinsurance 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 China Reinsurance, you can compare the effects of market volatilities on Ubisoft Entertainment and China Reinsurance 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 China Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and China Reinsurance.
Diversification Opportunities for Ubisoft Entertainment and China Reinsurance
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ubisoft and China is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and China Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reinsurance 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 China Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reinsurance has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and China Reinsurance go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and China Reinsurance
Assuming the 90 days horizon Ubisoft Entertainment SA is expected to under-perform the China Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, Ubisoft Entertainment SA is 4.31 times less risky than China Reinsurance. The stock trades about -0.01 of its potential returns per unit of risk. The China Reinsurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3.88 in China Reinsurance on October 16, 2024 and sell it today you would earn a total of 6.12 from holding China Reinsurance or generate 157.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubisoft Entertainment SA vs. China Reinsurance
Performance |
| Timeline |
| Ubisoft Entertainment |
| China Reinsurance |
Ubisoft Entertainment and China Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and China Reinsurance
The main advantage of trading using opposite Ubisoft Entertainment and China Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, China Reinsurance 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 China Reinsurance will offset losses from the drop in China Reinsurance's long position.| Ubisoft Entertainment vs. Japan Post Insurance | Ubisoft Entertainment vs. Jupiter Fund Management | Ubisoft Entertainment vs. Zurich Insurance Group | Ubisoft Entertainment vs. Goosehead Insurance |
| China Reinsurance vs. Ubisoft Entertainment SA | China Reinsurance vs. Tencent Music Entertainment | China Reinsurance vs. Townsquare Media | China Reinsurance vs. alstria office REIT AG |
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.
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