Correlation Between UBS Group and Bellevue Group

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

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

Diversification Opportunities for UBS Group and Bellevue Group

-0.5

Correlation Coefficient

UBS Group  Bellevue Group

Very good diversification

The 3 months correlation between UBS and Bellevue is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Bellevue Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bellevue Group AG and UBS Group 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 Group AG are associated (or correlated) with Bellevue Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bellevue Group AG has no effect on the direction of UBS Group i.e., UBS Group and Bellevue Group go up and down completely randomly.

Pair Corralation between UBS Group and Bellevue Group

Assuming the 90 days trading horizon UBS Group AG is expected to generate 1.07 times more return on investment than Bellevue Group. However, UBS Group is 1.07 times more volatile than Bellevue Group AG. It trades about 0.07 of its potential returns per unit of risk. Bellevue Group AG is currently generating about -0.5 per unit of risk. If you would invest  2,739  in UBS Group AG on October 6, 2024 and sell it today you would earn a total of  107.00  from holding UBS Group AG or generate 3.91% return on investment over 90 days.

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

UBS Group AG  vs.  Bellevue Group AG

UBS Group AG

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days UBS Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly weak basic indicators, UBS Group may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bellevue Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bellevue Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with UBS Group and Bellevue Group

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

The idea behind UBS Group AG and Bellevue Group AG 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.