Correlation Between FibraHotel and UBS Group
Can any of the company-specific risk be diversified away by investing in both FibraHotel 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 FibraHotel and UBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and UBS Group AG, you can compare the effects of market volatilities on FibraHotel 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 FibraHotel with a short position of UBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and UBS Group.
Diversification Opportunities for FibraHotel and UBS Group
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FibraHotel and UBS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel 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 FibraHotel 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 FibraHotel 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 FibraHotel i.e., FibraHotel and UBS Group go up and down completely randomly.
Pair Corralation between FibraHotel and UBS Group
Assuming the 90 days trading horizon FibraHotel is expected to under-perform the UBS Group. In addition to that, FibraHotel is 1.38 times more volatile than UBS Group AG. It trades about 0.0 of its total potential returns per unit of risk. UBS Group AG is currently generating about 0.1 per unit of volatility. If you would invest 43,446 in UBS Group AG on September 14, 2024 and sell it today you would earn a total of 22,554 from holding UBS Group AG or generate 51.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
FibraHotel vs. UBS Group AG
Performance |
| Timeline |
| FibraHotel |
| UBS Group AG |
FibraHotel and UBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and UBS Group
The main advantage of trading using opposite FibraHotel and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel 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.| FibraHotel vs. DXC Technology | FibraHotel vs. Micron Technology | FibraHotel vs. GMxico Transportes SAB | FibraHotel vs. Genworth Financial |
| UBS Group vs. Grupo Sports World | UBS Group vs. Monster Beverage Corp | UBS Group vs. FibraHotel | UBS Group vs. Southern Copper |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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