Correlation Between UBS Group and Peoples Fin
Can any of the company-specific risk be diversified away by investing in both UBS Group and Peoples Fin 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 Peoples Fin 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 Peoples Fin, you can compare the effects of market volatilities on UBS Group and Peoples Fin 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 Peoples Fin. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Peoples Fin.
Diversification Opportunities for UBS Group and Peoples Fin
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UBS and Peoples is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Peoples Fin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Fin 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 Peoples Fin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Fin has no effect on the direction of UBS Group i.e., UBS Group and Peoples Fin go up and down completely randomly.
Pair Corralation between UBS Group and Peoples Fin
Considering the 90-day investment horizon UBS Group AG is expected to generate 0.72 times more return on investment than Peoples Fin. However, UBS Group AG is 1.39 times less risky than Peoples Fin. It trades about 0.13 of its potential returns per unit of risk. Peoples Fin is currently generating about 0.02 per unit of risk. If you would invest 2,673 in UBS Group AG on February 20, 2024 and sell it today you would earn a total of 361.00 from holding UBS Group AG or generate 13.51% 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. Peoples Fin
Performance |
Timeline |
UBS Group AG |
Peoples Fin |
UBS Group and Peoples Fin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UBS Group and Peoples Fin
The main advantage of trading using opposite UBS Group and Peoples Fin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Peoples Fin 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 Peoples Fin will offset losses from the drop in Peoples Fin's long position.UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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