Correlation Between MBANK and Ubisoft Entertainment

Can any of the company-specific risk be diversified away by investing in both MBANK 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 MBANK and Ubisoft Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MBANK and Ubisoft Entertainment SA, you can compare the effects of market volatilities on MBANK 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 MBANK with a short position of Ubisoft Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MBANK and Ubisoft Entertainment.

Diversification Opportunities for MBANK and Ubisoft Entertainment

-0.25

Correlation Coefficient

MBANK  Ubisoft Entertainment

Very good diversification

The 3 months correlation between MBANK and Ubisoft is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MBANK and Ubisoft Entertainment SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and MBANK 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 MBANK 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 MBANK i.e., MBANK and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between MBANK and Ubisoft Entertainment

Assuming the 90 days trading horizon MBANK is expected to under-perform the Ubisoft Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, MBANK is 2.17 times less risky than Ubisoft Entertainment. The stock trades about -0.08 of its potential returns per unit of risk. The Ubisoft Entertainment SA is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,065  in Ubisoft Entertainment SA on September 27, 2024 and sell it today you would earn a total of  185.00  from holding Ubisoft Entertainment SA or generate 17.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MBANK  vs.  Ubisoft Entertainment SA

MBANK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MBANK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Ubisoft Entertainment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ubisoft Entertainment SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Ubisoft Entertainment reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MBANK and Ubisoft Entertainment

The main advantage of trading using opposite MBANK and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MBANK 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.

The idea behind MBANK and Ubisoft Entertainment SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.