Correlation Between Roper Technologies, and UBS Group

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

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

Diversification Opportunities for Roper Technologies, and UBS Group

0.23

Correlation Coefficient

Roper Technologies,  UBS Group

Modest diversification

The 3 months correlation between Roper and UBS is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Roper Technologies, and UBS Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Group AG and Roper Technologies, 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 Roper Technologies, are associated (or correlated) with UBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Group AG has no effect on the direction of Roper Technologies, i.e., Roper Technologies, and UBS Group go up and down completely randomly.

Pair Corralation between Roper Technologies, and UBS Group

Assuming the 90 days trading horizon Roper Technologies, is expected to generate 8.94 times less return on investment than UBS Group. But when comparing it to its historical volatility, Roper Technologies, is 157.4 times less risky than UBS Group. It trades about 0.13 of its potential returns per unit of risk. UBS Group AG is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  18,738  in UBS Group AG on December 21, 2024 and sell it today you would lose (61.00) from holding UBS Group AG or give up 0.33% of portfolio value over 90 days.

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

Roper Technologies,  vs.  UBS Group AG

Roper Technologies,

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Roper Technologies, is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

UBS Group AG

Risk-Adjusted Performance

Very Weak

Over the last 90 days UBS Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UBS Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Roper Technologies, and UBS Group

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

The idea behind Roper Technologies, and UBS Group AG 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.