Correlation Between UBS Plc and Amundi Treasury

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

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

Diversification Opportunities for UBS Plc and Amundi Treasury

-0.73

Correlation Coefficient

UBS Plc  Amundi Treasury

Pay attention - limited upside

The 3 months correlation between UBS and Amundi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding UBS plc and Amundi Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Treasury Bond and UBS Plc 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 plc are associated (or correlated) with Amundi Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Treasury Bond has no effect on the direction of UBS Plc i.e., UBS Plc and Amundi Treasury go up and down completely randomly.

Pair Corralation between UBS Plc and Amundi Treasury

Assuming the 90 days trading horizon UBS plc is expected to generate 0.86 times more return on investment than Amundi Treasury. However, UBS plc is 1.17 times less risky than Amundi Treasury. It trades about 0.13 of its potential returns per unit of risk. Amundi Treasury Bond is currently generating about 0.03 per unit of risk. If you would invest  816,433  in UBS plc on September 11, 2024 and sell it today you would earn a total of  96,667  from holding UBS plc or generate 11.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.22%
Values	Daily Returns

UBS plc   vs.  Amundi Treasury Bond

UBS plc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS plc are ranked lower than 15 (%) 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.

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.

Pair Trading with UBS Plc and Amundi Treasury

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

The idea behind UBS plc and Amundi Treasury Bond 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.