Correlation Between Konami Holdings and UbiSoft Entertainment

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

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

Diversification Opportunities for Konami Holdings and UbiSoft Entertainment

0.08

Correlation Coefficient

Konami Holdings  UbiSoft Entertainment

Significant diversification

The 3 months correlation between Konami and UbiSoft is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Konami Holdings and UbiSoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UbiSoft Entertainment and Konami Holdings 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 Konami Holdings 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 Konami Holdings i.e., Konami Holdings and UbiSoft Entertainment go up and down completely randomly.

Pair Corralation between Konami Holdings and UbiSoft Entertainment

If you would invest  5,488  in Konami Holdings on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Konami Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Konami Holdings  vs.  UbiSoft Entertainment

Konami Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Konami Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Konami Holdings is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

UbiSoft Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UbiSoft Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Konami Holdings and UbiSoft Entertainment

The main advantage of trading using opposite Konami Holdings and UbiSoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Konami Holdings 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 Konami Holdings and UbiSoft Entertainment 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..