Correlation Between UBS ETF and BB Biotech
Can any of the company-specific risk be diversified away by investing in both UBS ETF and BB Biotech 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 ETF and BB Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF MSCI and BB Biotech AG, you can compare the effects of market volatilities on UBS ETF and BB Biotech 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 ETF with a short position of BB Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and BB Biotech.
Diversification Opportunities for UBS ETF and BB Biotech
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBS and BION is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and BB Biotech AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BB Biotech AG and UBS ETF 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 ETF MSCI are associated (or correlated) with BB Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BB Biotech AG has no effect on the direction of UBS ETF i.e., UBS ETF and BB Biotech go up and down completely randomly.
Pair Corralation between UBS ETF and BB Biotech
Assuming the 90 days trading horizon UBS ETF MSCI is expected to generate 0.53 times more return on investment than BB Biotech. However, UBS ETF MSCI is 1.9 times less risky than BB Biotech. It trades about 0.05 of its potential returns per unit of risk. BB Biotech AG is currently generating about -0.04 per unit of risk. If you would invest 1,741 in UBS ETF MSCI on August 24, 2024 and sell it today you would earn a total of 253.00 from holding UBS ETF MSCI or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF MSCI vs. BB Biotech AG
Performance |
| Timeline |
| UBS ETF MSCI |
| BB Biotech AG |
UBS ETF and BB Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and BB Biotech
The main advantage of trading using opposite UBS ETF and BB Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, BB Biotech 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 BB Biotech will offset losses from the drop in BB Biotech's long position.| UBS ETF vs. UBSFund Solutions MSCI | UBS ETF vs. iShares VII PLC | UBS ETF vs. iShares Core SP | UBS ETF vs. Lyxor Japan UCITS |
| BB Biotech vs. Santhera Pharmaceuticals Holding | BB Biotech vs. Evolva Holding SA | BB Biotech vs. COSMO Pharmaceuticals SA |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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