Correlation Between Ubisoft Entertainment and AerCap Holdings
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and AerCap Holdings 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 AerCap Holdings 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 AerCap Holdings NV, you can compare the effects of market volatilities on Ubisoft Entertainment and AerCap Holdings 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 AerCap Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and AerCap Holdings.
Diversification Opportunities for Ubisoft Entertainment and AerCap Holdings
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ubisoft and AerCap is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and AerCap Holdings NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AerCap Holdings NV 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 AerCap Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AerCap Holdings NV has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and AerCap Holdings go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and AerCap Holdings
Assuming the 90 days horizon Ubisoft Entertainment SA is expected to under-perform the AerCap Holdings. In addition to that, Ubisoft Entertainment is 2.02 times more volatile than AerCap Holdings NV. It trades about -0.03 of its total potential returns per unit of risk. AerCap Holdings NV is currently generating about 0.07 per unit of volatility. If you would invest 5,502 in AerCap Holdings NV on September 3, 2024 and sell it today you would earn a total of 3,708 from holding AerCap Holdings NV or generate 67.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubisoft Entertainment SA vs. AerCap Holdings NV
Performance |
| Timeline |
| Ubisoft Entertainment |
| AerCap Holdings NV |
Ubisoft Entertainment and AerCap Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and AerCap Holdings
The main advantage of trading using opposite Ubisoft Entertainment and AerCap Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, AerCap Holdings 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 AerCap Holdings will offset losses from the drop in AerCap Holdings' long position.| Ubisoft Entertainment vs. Nintendo Co | Ubisoft Entertainment vs. Nintendo Co | Ubisoft Entertainment vs. Sea Limited | Ubisoft Entertainment vs. Take Two Interactive Software |
| AerCap Holdings vs. Perseus Mining Limited | AerCap Holdings vs. FAST RETAIL ADR | AerCap Holdings vs. Ubisoft Entertainment SA | AerCap Holdings vs. CNVISION MEDIA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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