Correlation Between SP Global and UBS Group
Can any of the company-specific risk be diversified away by investing in both SP Global 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 SP Global and UBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SP Global and UBS Group AG, you can compare the effects of market volatilities on SP Global 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 SP Global with a short position of UBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SP Global and UBS Group.
Diversification Opportunities for SP Global and UBS Group
Very weak diversification
The 3 months correlation between SPGI and UBS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding SP Global 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 SP Global 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 SP Global 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 SP Global i.e., SP Global and UBS Group go up and down completely randomly.
Pair Corralation between SP Global and UBS Group
Given the investment horizon of 90 days SP Global is expected to generate 1.3 times less return on investment than UBS Group. But when comparing it to its historical volatility, SP Global is 1.55 times less risky than UBS Group. It trades about 0.08 of its potential returns per unit of risk. UBS Group AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,034 in UBS Group AG on November 9, 2024 and sell it today you would earn a total of 1,305 from holding UBS Group AG or generate 64.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SP Global vs. UBS Group AG
Performance |
| Timeline |
| SP Global |
| UBS Group AG |
SP Global and UBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SP Global and UBS Group
The main advantage of trading using opposite SP Global and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SP Global 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.| SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc | SP Global vs. Intercontinental Exchange | SP Global vs. CME Group |
| UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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