Correlation Between Spotify Technology and Ubisoft Entertainment

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

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

Diversification Opportunities for Spotify Technology and Ubisoft Entertainment

-0.5

Correlation Coefficient

Spotify Technology  Ubisoft Entertainment

Very good diversification

The 3 months correlation between Spotify and Ubisoft is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Ubisoft Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubisoft Entertainment and Spotify Technology 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 Spotify Technology SA 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 Spotify Technology i.e., Spotify Technology and Ubisoft Entertainment go up and down completely randomly.

Pair Corralation between Spotify Technology and Ubisoft Entertainment

Assuming the 90 days trading horizon Spotify Technology SA is expected to generate 0.68 times more return on investment than Ubisoft Entertainment. However, Spotify Technology SA is 1.48 times less risky than Ubisoft Entertainment. It trades about 0.08 of its potential returns per unit of risk. Ubisoft Entertainment is currently generating about 0.0 per unit of risk. If you would invest  53,320  in Spotify Technology SA on April 24, 2025 and sell it today you would earn a total of  5,990  from holding Spotify Technology SA or generate 11.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Spotify Technology SA  vs.  Ubisoft Entertainment

Spotify Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Spotify Technology SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Spotify Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Ubisoft Entertainment

Risk-Adjusted Performance

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 comparatively stable basic indicators, Ubisoft Entertainment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Spotify Technology and Ubisoft Entertainment

The main advantage of trading using opposite Spotify Technology and Ubisoft Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology 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 Spotify Technology SA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.