Correlation Between Amundi Treasury and UBS Plc

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

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

Diversification Opportunities for Amundi Treasury and UBS Plc

-0.75

Correlation Coefficient

Amundi Treasury  UBS Plc

Pay attention - limited upside

The 3 months correlation between Amundi and UBS is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Amundi Treasury Bond and UBS plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS plc and Amundi Treasury 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 Amundi Treasury Bond are associated (or correlated) with UBS Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS plc has no effect on the direction of Amundi Treasury i.e., Amundi Treasury and UBS Plc go up and down completely randomly.

Pair Corralation between Amundi Treasury and UBS Plc

Assuming the 90 days trading horizon Amundi Treasury is expected to generate 16.2 times less return on investment than UBS Plc. In addition to that, Amundi Treasury is 1.31 times more volatile than UBS plc . It trades about 0.0 of its total potential returns per unit of risk. UBS plc is currently generating about 0.07 per unit of volatility. If you would invest  731,132  in UBS plc on September 10, 2024 and sell it today you would earn a total of  189,268  from holding UBS plc or generate 25.89% return on investment over 90 days.

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

Amundi Treasury Bond  vs.  UBS plc

Amundi Treasury Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi Treasury Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Amundi Treasury is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

UBS plc

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS plc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UBS Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Amundi Treasury and UBS Plc

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

The idea behind Amundi Treasury Bond and UBS plc 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.