Correlation Between Ubisoft Entertainment and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Ubisoft Entertainment and Webster Financial 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 Webster Financial 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 Webster Financial, you can compare the effects of market volatilities on Ubisoft Entertainment and Webster Financial 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 Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubisoft Entertainment and Webster Financial.
Diversification Opportunities for Ubisoft Entertainment and Webster Financial
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ubisoft and Webster is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Ubisoft Entertainment SA and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial 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 Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of Ubisoft Entertainment i.e., Ubisoft Entertainment and Webster Financial go up and down completely randomly.
Pair Corralation between Ubisoft Entertainment and Webster Financial
Assuming the 90 days horizon Ubisoft Entertainment SA is expected to under-perform the Webster Financial. But the stock apears to be less risky and, when comparing its historical volatility, Ubisoft Entertainment SA is 1.86 times less risky than Webster Financial. The stock trades about -0.15 of its potential returns per unit of risk. The Webster Financial is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,740 in Webster Financial on August 24, 2024 and sell it today you would earn a total of 910.00 from holding Webster Financial or generate 19.2% 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. Webster Financial
Performance |
| Timeline |
| Ubisoft Entertainment |
| Webster Financial |
Ubisoft Entertainment and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubisoft Entertainment and Webster Financial
The main advantage of trading using opposite Ubisoft Entertainment and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubisoft Entertainment position performs unexpectedly, Webster Financial 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 Webster Financial will offset losses from the drop in Webster Financial's long position.| Ubisoft Entertainment vs. Sea Limited | Ubisoft Entertainment vs. NEXON Co | Ubisoft Entertainment vs. Take Two Interactive Software | Ubisoft Entertainment vs. Bilibili |
| Webster Financial vs. Regions Financial | Webster Financial vs. Superior Plus Corp | Webster Financial vs. NMI Holdings | Webster Financial vs. Origin Agritech |
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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