Correlation Between Dollar General and Ubisoft Entertainment
Can any of the company-specific risk be diversified away by investing in both Dollar General and Ubisoft Entertainment 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 Dollar General and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Ubisoft Entertainment, you can compare the effects of market volatilities on Dollar General and Ubisoft Entertainment 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 Dollar General with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Ubisoft Entertainment.
Diversification Opportunities for Dollar General and Ubisoft Entertainment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dollar and Ubisoft is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Dollar General 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 Dollar General are associated (or correlated) with Ubisoft Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubisoft Entertainment has no effect on the direction of Dollar General i.e., Dollar General and Ubisoft Entertainment go up and down completely randomly.
Pair Corralation between Dollar General and Ubisoft Entertainment
Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the Ubisoft Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Dollar General is 1.06 times less risky than Ubisoft Entertainment. The stock trades about -0.14 of its potential returns per unit of risk. The Ubisoft Entertainment is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,955 in Ubisoft Entertainment on January 26, 2024 and sell it today you would earn a total of 213.00 from holding Ubisoft Entertainment or generate 10.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dollar General vs. Ubisoft Entertainment
Performance |
| Timeline |
| Dollar General |
| Ubisoft Entertainment |
Dollar General and Ubisoft Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Ubisoft Entertainment
The main advantage of trading using opposite Dollar General and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, Ubisoft Entertainment 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 Ubisoft Entertainment will offset losses from the drop in Ubisoft Entertainment's long position.| Dollar General vs. BJs Wholesale Club | Dollar General vs. Big Lots | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart |
| Ubisoft Entertainment vs. BigBen Interactive | Ubisoft Entertainment vs. Neoen SA | Ubisoft Entertainment vs. Voltalia SA |
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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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