Correlation Between UBS Institutional and UBS PF

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

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

Diversification Opportunities for UBS Institutional and UBS PF

0.66

Correlation Coefficient

UBS Institutional  UBS PF

Poor diversification

The 3 months correlation between UBS and UBS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding UBS Institutional and UBS PF Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS PF Swiss and UBS Institutional 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 Institutional are associated (or correlated) with UBS PF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS PF Swiss has no effect on the direction of UBS Institutional i.e., UBS Institutional and UBS PF go up and down completely randomly.

Pair Corralation between UBS Institutional and UBS PF

Assuming the 90 days trading horizon UBS Institutional is expected to generate 0.71 times more return on investment than UBS PF. However, UBS Institutional is 1.41 times less risky than UBS PF. It trades about 0.16 of its potential returns per unit of risk. UBS PF Swiss is currently generating about 0.07 per unit of risk. If you would invest  249,991  in UBS Institutional on October 7, 2024 and sell it today you would earn a total of  19,267  from holding UBS Institutional or generate 7.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

UBS Institutional  vs.  UBS PF Swiss

UBS Institutional

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days UBS Institutional has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly abnormal forward indicators, UBS Institutional may actually be approaching a critical reversion point that can send shares even higher in February 2025.

UBS PF Swiss

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UBS PF Swiss are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, UBS PF is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with UBS Institutional and UBS PF

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

The idea behind UBS Institutional and UBS PF Swiss 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.