Correlation Between Swisscanto and UBSFund Solutions

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

By analyzing existing cross correlation between Swisscanto CH Real and UBSFund Solutions MSCI, you can compare the effects of market volatilities on Swisscanto and UBSFund Solutions 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 Swisscanto with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swisscanto and UBSFund Solutions.

Diversification Opportunities for Swisscanto and UBSFund Solutions

0.52

Correlation Coefficient

Swisscanto  UBSFund Solutions

Very weak diversification

The 3 months correlation between Swisscanto and UBSFund is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Swisscanto CH Real and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Swisscanto 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 Swisscanto CH Real are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Swisscanto i.e., Swisscanto and UBSFund Solutions go up and down completely randomly.

Pair Corralation between Swisscanto and UBSFund Solutions

Assuming the 90 days trading horizon Swisscanto CH Real is expected to generate 0.45 times more return on investment than UBSFund Solutions. However, Swisscanto CH Real is 2.22 times less risky than UBSFund Solutions. It trades about 0.05 of its potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.0 per unit of risk. If you would invest  18,500  in Swisscanto CH Real on September 28, 2024 and sell it today you would earn a total of  650.00  from holding Swisscanto CH Real or generate 3.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.19%
Values	Daily Returns

Swisscanto CH Real  vs.  UBSFund Solutions MSCI

Swisscanto CH Real

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Swisscanto CH Real are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable fundamental indicators, Swisscanto is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

UBSFund Solutions MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Swisscanto and UBSFund Solutions

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

The idea behind Swisscanto CH Real and UBSFund Solutions MSCI 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.