Correlation Between Invesco Health and UBS Plc

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

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

Diversification Opportunities for Invesco Health and UBS Plc

0.0

Correlation Coefficient

Invesco Health  UBS Plc

Pay attention - limited upside

The 3 months correlation between Invesco and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Health Care and UBS plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS plc and Invesco Health 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 Invesco Health Care 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 Invesco Health i.e., Invesco Health and UBS Plc go up and down completely randomly.

Pair Corralation between Invesco Health and UBS Plc

If you would invest  844,850  in UBS plc on September 9, 2024 and sell it today you would earn a total of  75,550  from holding UBS plc or generate 8.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Invesco Health Care  vs.  UBS plc

Invesco Health Care

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Health Care has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Invesco Health is not utilizing all of its potentials. The current 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 Invesco Health and UBS Plc

The main advantage of trading using opposite Invesco Health and UBS Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Health 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 Invesco Health Care 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.