Correlation Between UBS Property and UBS CH

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

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

Diversification Opportunities for UBS Property and UBS CH

0.38

Correlation Coefficient

UBS Property  UBS CH

Weak diversification

The 3 months correlation between UBS and UBS is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding UBS Property and UBS CH Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS CH Property 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 UBS CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS CH Property has no effect on the direction of UBS Property i.e., UBS Property and UBS CH go up and down completely randomly.

Pair Corralation between UBS Property and UBS CH

Assuming the 90 days trading horizon UBS Property is expected to generate 0.6 times more return on investment than UBS CH. However, UBS Property is 1.66 times less risky than UBS CH. It trades about 0.17 of its potential returns per unit of risk. UBS CH Property is currently generating about 0.0 per unit of risk. If you would invest  6,620  in UBS Property on October 22, 2024 and sell it today you would earn a total of  720.00  from holding UBS Property or generate 10.88% return on investment over 90 days.

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

UBS Property  vs.  UBS CH Property

UBS Property

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Property are ranked lower than 13 (%) 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.

UBS CH Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS CH Property has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable basic indicators, UBS CH is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with UBS Property and UBS CH

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

The idea behind UBS Property and UBS CH 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.