Correlation Between Invesco Optimum and UBS

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

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

Diversification Opportunities for Invesco Optimum and UBS

0.0

Correlation Coefficient

Invesco Optimum  UBS

Pay attention - limited upside

The 3 months correlation between Invesco and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Optimum Yield and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and Invesco Optimum 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 Invesco Optimum Yield are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of Invesco Optimum i.e., Invesco Optimum and UBS go up and down completely randomly.

Pair Corralation between Invesco Optimum and UBS

If you would invest  1,279  in Invesco Optimum Yield on October 6, 2024 and sell it today you would earn a total of  26.00  from holding Invesco Optimum Yield or generate 2.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco Optimum Yield  vs.  UBS

Invesco Optimum Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Optimum Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, Invesco Optimum is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

UBS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, UBS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Invesco Optimum and UBS

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

The idea behind Invesco Optimum Yield and UBS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.