Correlation Between UBS Property and CSIF I

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

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

Diversification Opportunities for UBS Property and CSIF I

0.61

Correlation Coefficient

UBS Property  CSIF I

Poor diversification

The 3 months correlation between UBS and CSIF is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding UBS Property and CSIF I Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSIF I Real and UBS Property 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 UBS Property are associated (or correlated) with CSIF I. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSIF I Real has no effect on the direction of UBS Property i.e., UBS Property and CSIF I go up and down completely randomly.

Pair Corralation between UBS Property and CSIF I

Assuming the 90 days trading horizon UBS Property is expected to generate 1.11 times less return on investment than CSIF I. In addition to that, UBS Property is 1.36 times more volatile than CSIF I Real. It trades about 0.04 of its total potential returns per unit of risk. CSIF I Real is currently generating about 0.06 per unit of volatility. If you would invest  168,382  in CSIF I Real on October 15, 2024 and sell it today you would earn a total of  31,601  from holding CSIF I Real or generate 18.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.59%
Values	Daily Returns

UBS Property  vs.  CSIF I Real

UBS Property

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Property are ranked lower than 9 (%) 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.

CSIF I Real

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CSIF I Real are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unsteady technical and fundamental indicators, CSIF I may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with UBS Property and CSIF I

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

The idea behind UBS Property and CSIF I Real 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.