Correlation Between UBM Development and AT S

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

By analyzing existing cross correlation between UBM Development AG and AT S Austria, you can compare the effects of market volatilities on UBM Development and AT S 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 UBM Development with a short position of AT S. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBM Development and AT S.

Diversification Opportunities for UBM Development and AT S

0.7

Correlation Coefficient

UBM Development  AT S

Poor diversification

The 3 months correlation between UBM and ATS is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding UBM Development AG and AT S Austria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AT S Austria and UBM Development 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 UBM Development AG are associated (or correlated) with AT S. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AT S Austria has no effect on the direction of UBM Development i.e., UBM Development and AT S go up and down completely randomly.

Pair Corralation between UBM Development and AT S

Assuming the 90 days trading horizon UBM Development AG is expected to generate 0.58 times more return on investment than AT S. However, UBM Development AG is 1.73 times less risky than AT S. It trades about 0.21 of its potential returns per unit of risk. AT S Austria is currently generating about 0.09 per unit of risk. If you would invest  1,650  in UBM Development AG on December 27, 2024 and sell it today you would earn a total of  490.00  from holding UBM Development AG or generate 29.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.41%
Values	Daily Returns

UBM Development AG  vs.  AT S Austria

UBM Development AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBM Development AG are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, UBM Development demonstrated solid returns over the last few months and may actually be approaching a breakup point.

AT S Austria

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AT S Austria are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, AT S demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UBM Development and AT S

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

The idea behind UBM Development AG and AT S Austria 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..