Correlation Between UBS Group and Appian Corp

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

By analyzing existing cross correlation between UBS Group AG and Appian Corp, you can compare the effects of market volatilities on UBS Group and Appian Corp 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 UBS Group with a short position of Appian Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Appian Corp.

Diversification Opportunities for UBS Group and Appian Corp

0.54

Correlation Coefficient

UBS Group  Appian Corp

Very weak diversification

The 3 months correlation between UBS and Appian is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and UBS Group 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 UBS Group AG are associated (or correlated) with Appian Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appian Corp has no effect on the direction of UBS Group i.e., UBS Group and Appian Corp go up and down completely randomly.

Pair Corralation between UBS Group and Appian Corp

Considering the 90-day investment horizon UBS Group AG is expected to generate 0.64 times more return on investment than Appian Corp. However, UBS Group AG is 1.56 times less risky than Appian Corp. It trades about 0.06 of its potential returns per unit of risk. Appian Corp is currently generating about 0.0 per unit of risk. If you would invest  2,122  in UBS Group AG on January 24, 2024 and sell it today you would earn a total of  717.00  from holding UBS Group AG or generate 33.79% return on investment over 90 days.

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

UBS Group AG  vs.  Appian Corp

UBS Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, UBS Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Appian Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Appian Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Appian Corp may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with UBS Group and Appian Corp

The main advantage of trading using opposite UBS Group and Appian Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Appian Corp 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 Appian Corp will offset losses from the drop in Appian Corp's long position.

The idea behind UBS Group AG and Appian Corp 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 Stocks Directory module to find actively traded stocks across global markets.