Correlation Between Barclays PLC and UBS Group
Can any of the company-specific risk be diversified away by investing in both Barclays PLC and UBS 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 Barclays PLC and UBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barclays PLC ADR and UBS Group AG, you can compare the effects of market volatilities on Barclays PLC and UBS 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 Barclays PLC with a short position of UBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barclays PLC and UBS Group.
Diversification Opportunities for Barclays PLC and UBS Group
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Barclays and UBS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Barclays PLC ADR and UBS Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Group AG and Barclays 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 Barclays PLC ADR are associated (or correlated) with UBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Group AG has no effect on the direction of Barclays PLC i.e., Barclays PLC and UBS Group go up and down completely randomly.
Pair Corralation between Barclays PLC and UBS Group
Considering the 90-day investment horizon Barclays PLC ADR is expected to generate 1.06 times more return on investment than UBS Group. However, Barclays PLC is 1.06 times more volatile than UBS Group AG. It trades about 0.08 of its potential returns per unit of risk. UBS Group AG is currently generating about -0.02 per unit of risk. If you would invest 1,259 in Barclays PLC ADR on August 26, 2024 and sell it today you would earn a total of 38.00 from holding Barclays PLC ADR or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barclays PLC ADR vs. UBS Group AG
Performance |
| Timeline |
| Barclays PLC ADR |
| UBS Group AG |
Barclays PLC and UBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barclays PLC and UBS Group
The main advantage of trading using opposite Barclays PLC and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barclays PLC position performs unexpectedly, UBS 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 UBS Group will offset losses from the drop in UBS Group's long position.| Barclays PLC vs. Banco Bilbao Viscaya | Barclays PLC vs. Banco Santander SA | Barclays PLC vs. UBS Group AG | Barclays PLC vs. HSBC Holdings PLC |
| UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |