Correlation Between Swedbank Robur and UBS Money

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

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

Diversification Opportunities for Swedbank Robur and UBS Money

0.78

Correlation Coefficient

Swedbank Robur  UBS Money

Poor diversification

The 3 months correlation between Swedbank and UBS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Swedbank Robur Corporate and UBS Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Money Market and Swedbank Robur 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 Swedbank Robur Corporate are associated (or correlated) with UBS Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Money Market has no effect on the direction of Swedbank Robur i.e., Swedbank Robur and UBS Money go up and down completely randomly.

Pair Corralation between Swedbank Robur and UBS Money

Assuming the 90 days trading horizon Swedbank Robur Corporate is expected to under-perform the UBS Money. But the fund apears to be less risky and, when comparing its historical volatility, Swedbank Robur Corporate is 2.23 times less risky than UBS Money. The fund trades about -0.17 of its potential returns per unit of risk. The UBS Money Market is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  192,077  in UBS Money Market on October 1, 2024 and sell it today you would earn a total of  2,310  from holding UBS Money Market or generate 1.2% return on investment over 90 days.

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

Swedbank Robur Corporate  vs.  UBS Money Market

Swedbank Robur Corporate

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank Robur Corporate are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, Swedbank Robur is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

UBS Money Market

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Money Market are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, UBS Money may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Swedbank Robur and UBS Money

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

The idea behind Swedbank Robur Corporate and UBS Money Market 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.