Correlation Between Ubs International and Cref Money
Can any of the company-specific risk be diversified away by investing in both Ubs International and Cref Money 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 International and Cref Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubs International Sustainable and Cref Money Market, you can compare the effects of market volatilities on Ubs International and Cref Money 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 International with a short position of Cref Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs International and Cref Money.
Diversification Opportunities for Ubs International and Cref Money
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ubs and Cref is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Ubs International Sustainable and Cref Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Money Market and Ubs International 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 International Sustainable are associated (or correlated) with Cref Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Money Market has no effect on the direction of Ubs International i.e., Ubs International and Cref Money go up and down completely randomly.
Pair Corralation between Ubs International and Cref Money
Assuming the 90 days horizon Ubs International Sustainable is expected to generate 41.03 times more return on investment than Cref Money. However, Ubs International is 41.03 times more volatile than Cref Money Market. It trades about 0.38 of its potential returns per unit of risk. Cref Money Market is currently generating about 1.02 per unit of risk. If you would invest 1,003 in Ubs International Sustainable on November 1, 2024 and sell it today you would earn a total of 54.00 from holding Ubs International Sustainable or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Ubs International Sustainable vs. Cref Money Market
Performance |
| Timeline |
| Ubs International |
| Cref Money Market |
Ubs International and Cref Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubs International and Cref Money
The main advantage of trading using opposite Ubs International and Cref Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubs International position performs unexpectedly, Cref Money 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 Cref Money will offset losses from the drop in Cref Money's long position.The idea behind Ubs International Sustainable and Cref Money Market 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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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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