Correlation Between BB Biotech and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both BB Biotech and UBSFund Solutions 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 UBSFund Solutions 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 UBSFund Solutions MSCI, you can compare the effects of market volatilities on BB Biotech and UBSFund Solutions 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 UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of BB Biotech and UBSFund Solutions.
Diversification Opportunities for BB Biotech and UBSFund Solutions
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between BION and UBSFund is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding BB Biotech AG and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions 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 UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of BB Biotech i.e., BB Biotech and UBSFund Solutions go up and down completely randomly.
Pair Corralation between BB Biotech and UBSFund Solutions
Assuming the 90 days trading horizon BB Biotech AG is expected to under-perform the UBSFund Solutions. In addition to that, BB Biotech is 1.25 times more volatile than UBSFund Solutions MSCI. It trades about -0.2 of its total potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.17 per unit of volatility. If you would invest 4,838 in UBSFund Solutions MSCI on September 13, 2024 and sell it today you would earn a total of 149.00 from holding UBSFund Solutions MSCI or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
BB Biotech AG vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| BB Biotech AG |
| UBSFund Solutions MSCI |
BB Biotech and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BB Biotech and UBSFund Solutions
The main advantage of trading using opposite BB Biotech and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Biotech position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' 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 |
| UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg | UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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