Correlation Between NYSE Composite and UBS AG
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and UBS AG 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 NYSE Composite and UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and UBS AG London, you can compare the effects of market volatilities on NYSE Composite and UBS AG 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 NYSE Composite with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and UBS AG.
Diversification Opportunities for NYSE Composite and UBS AG
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and UBS is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and NYSE Composite 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 NYSE Composite are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of NYSE Composite i.e., NYSE Composite and UBS AG go up and down completely randomly.
Pair Corralation between NYSE Composite and UBS AG
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.13 times less return on investment than UBS AG. But when comparing it to its historical volatility, NYSE Composite is 3.08 times less risky than UBS AG. It trades about 0.04 of its potential returns per unit of risk. UBS AG London is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,585 in UBS AG London on November 28, 2024 and sell it today you would earn a total of 228.00 from holding UBS AG London or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. UBS AG London
Performance |
| Timeline |
NYSE Composite and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
UBS AG London
Pair trading matchups for UBS AG
Pair Trading with NYSE Composite and UBS AG
The main advantage of trading using opposite NYSE Composite and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, UBS AG 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 AG will offset losses from the drop in UBS AG's long position.| NYSE Composite vs. Inter Parfums | NYSE Composite vs. Amkor Technology | NYSE Composite vs. Unilever PLC ADR | NYSE Composite vs. Estee Lauder Companies |
| UBS AG vs. USCF SummerHaven Dynamic | UBS AG vs. First Trust Alternative | UBS AG vs. iShares Bloomberg Roll |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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