Correlation Between BCV Swiss and UBS Property

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

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

Diversification Opportunities for BCV Swiss and UBS Property

0.82

Correlation Coefficient

BCV Swiss  UBS Property

Very poor diversification

The 3 months correlation between BCV and UBS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding BCV Swiss Franc and UBS Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Property and BCV Swiss 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 BCV Swiss Franc are associated (or correlated) with UBS Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Property has no effect on the direction of BCV Swiss i.e., BCV Swiss and UBS Property go up and down completely randomly.

Pair Corralation between BCV Swiss and UBS Property

Assuming the 90 days trading horizon BCV Swiss Franc is expected to under-perform the UBS Property. But the fund apears to be less risky and, when comparing its historical volatility, BCV Swiss Franc is 11.04 times less risky than UBS Property. The fund trades about -0.47 of its potential returns per unit of risk. The UBS Property is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,140  in UBS Property on October 16, 2024 and sell it today you would earn a total of  160.00  from holding UBS Property or generate 2.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	93.33%
Values	Daily Returns

BCV Swiss Franc  vs.  UBS Property

BCV Swiss Franc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BCV Swiss Franc are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable basic indicators, BCV Swiss is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

UBS Property

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Property are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal basic indicators, UBS Property may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BCV Swiss and UBS Property

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

The idea behind BCV Swiss Franc and UBS Property 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.