Correlation Between BB Biotech and UBS ETF
Can any of the company-specific risk be diversified away by investing in both BB Biotech and UBS ETF 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 BB Biotech and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BB Biotech AG and UBS ETF MSCI, you can compare the effects of market volatilities on BB Biotech and UBS ETF 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 BB Biotech with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and UBS ETF.
Diversification Opportunities for BB Biotech and UBS ETF
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BION and UBS is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and UBS ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF MSCI and BB Biotech 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 BB Biotech AG are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF MSCI has no effect on the direction of BB Biotech i.e., BB Biotech and UBS ETF go up and down completely randomly.
Pair Corralation between BB Biotech and UBS ETF
Assuming the 90 days trading horizon BB Biotech AG is expected to generate 1.91 times more return on investment than UBS ETF. However, BB Biotech is 1.91 times more volatile than UBS ETF MSCI. It trades about 0.07 of its potential returns per unit of risk. UBS ETF MSCI is currently generating about -0.19 per unit of risk. If you would invest 3,640 in BB Biotech AG on August 28, 2024 and sell it today you would earn a total of 75.00 from holding BB Biotech AG or generate 2.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BB Biotech AG vs. UBS ETF MSCI
Performance |
| Timeline |
| BB Biotech AG |
| UBS ETF MSCI |
BB Biotech and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and UBS ETF
The main advantage of trading using opposite BB Biotech and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, UBS ETF 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 ETF will offset losses from the drop in UBS ETF's long position.| BB Biotech vs. Swiss Life Holding | BB Biotech vs. Swiss Re AG | BB Biotech vs. Helvetia Holding AG | BB Biotech vs. Partners Group Holding |
| UBS ETF vs. UBSFund Solutions MSCI | UBS ETF vs. iShares VII PLC | UBS ETF vs. iShares SP 500 | UBS ETF vs. Lyxor UCITS Stoxx |
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 Stocks Directory module to find actively traded stocks across global markets.
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