Correlation Between Ziff Davis and Ubiquiti Networks
Can any of the company-specific risk be diversified away by investing in both Ziff Davis and Ubiquiti Networks 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 Ziff Davis and Ubiquiti Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ziff Davis and Ubiquiti Networks, you can compare the effects of market volatilities on Ziff Davis and Ubiquiti Networks 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 Ziff Davis with a short position of Ubiquiti Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ziff Davis and Ubiquiti Networks.
Diversification Opportunities for Ziff Davis and Ubiquiti Networks
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ziff and Ubiquiti is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ziff Davis and Ubiquiti Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubiquiti Networks and Ziff Davis 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 Ziff Davis are associated (or correlated) with Ubiquiti Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubiquiti Networks has no effect on the direction of Ziff Davis i.e., Ziff Davis and Ubiquiti Networks go up and down completely randomly.
Pair Corralation between Ziff Davis and Ubiquiti Networks
Allowing for the 90-day total investment horizon Ziff Davis is expected to under-perform the Ubiquiti Networks. But the stock apears to be less risky and, when comparing its historical volatility, Ziff Davis is 1.23 times less risky than Ubiquiti Networks. The stock trades about -0.01 of its potential returns per unit of risk. The Ubiquiti Networks is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,429 in Ubiquiti Networks on August 24, 2024 and sell it today you would earn a total of 23,143 from holding Ubiquiti Networks or generate 202.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ziff Davis vs. Ubiquiti Networks
Performance |
| Timeline |
| Ziff Davis |
| Ubiquiti Networks |
Ziff Davis and Ubiquiti Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ziff Davis and Ubiquiti Networks
The main advantage of trading using opposite Ziff Davis and Ubiquiti Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziff Davis position performs unexpectedly, Ubiquiti Networks 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 Ubiquiti Networks will offset losses from the drop in Ubiquiti Networks' long position.| Ziff Davis vs. Interpublic Group of | Ziff Davis vs. Criteo Sa | Ziff Davis vs. WPP PLC ADR | Ziff Davis vs. Integral Ad Science |
| Ubiquiti Networks vs. Frequency Electronics | Ubiquiti Networks vs. Actelis Networks | Ubiquiti Networks vs. Optical Cable | Ubiquiti Networks vs. Lantronix |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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