Correlation Between UBS AG and USCF Midstream
Can any of the company-specific risk be diversified away by investing in both UBS AG and USCF Midstream 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 AG and USCF Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG London and USCF Midstream Energy, you can compare the effects of market volatilities on UBS AG and USCF Midstream 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 AG with a short position of USCF Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and USCF Midstream.
Diversification Opportunities for UBS AG and USCF Midstream
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UBS and USCF is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London and USCF Midstream Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USCF Midstream Energy and UBS AG 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 AG London are associated (or correlated) with USCF Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USCF Midstream Energy has no effect on the direction of UBS AG i.e., UBS AG and USCF Midstream go up and down completely randomly.
Pair Corralation between UBS AG and USCF Midstream
Given the investment horizon of 90 days UBS AG London is expected to generate 0.87 times more return on investment than USCF Midstream. However, UBS AG London is 1.15 times less risky than USCF Midstream. It trades about 0.66 of its potential returns per unit of risk. USCF Midstream Energy is currently generating about 0.53 per unit of risk. If you would invest 2,362 in UBS AG London on September 1, 2024 and sell it today you would earn a total of 352.00 from holding UBS AG London or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS AG London vs. USCF Midstream Energy
Performance |
| Timeline |
| UBS AG London |
| USCF Midstream Energy |
UBS AG and USCF Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS AG and USCF Midstream
The main advantage of trading using opposite UBS AG and USCF Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG position performs unexpectedly, USCF Midstream 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 USCF Midstream will offset losses from the drop in USCF Midstream's long position.| UBS AG vs. First Trust Exchange Traded | UBS AG vs. Ultimus Managers Trust | UBS AG vs. Horizon Kinetics Medical | UBS AG vs. Harbor Health Care |
| USCF Midstream vs. First Trust North | USCF Midstream vs. Global X MLP | USCF Midstream vs. Tortoise North American | USCF Midstream vs. UBS AG London |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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