Correlation Between UBS Group and Ducommun Incorporated
Can any of the company-specific risk be diversified away by investing in both UBS Group and Ducommun Incorporated 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 Group and Ducommun Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Group AG and Ducommun Incorporated, you can compare the effects of market volatilities on UBS Group and Ducommun Incorporated 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 Group with a short position of Ducommun Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Ducommun Incorporated.
Diversification Opportunities for UBS Group and Ducommun Incorporated
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Ducommun is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Ducommun Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ducommun Incorporated and UBS Group 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 Group AG are associated (or correlated) with Ducommun Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ducommun Incorporated has no effect on the direction of UBS Group i.e., UBS Group and Ducommun Incorporated go up and down completely randomly.
Pair Corralation between UBS Group and Ducommun Incorporated
Considering the 90-day investment horizon UBS Group AG is expected to generate 1.57 times more return on investment than Ducommun Incorporated. However, UBS Group is 1.57 times more volatile than Ducommun Incorporated. It trades about 0.08 of its potential returns per unit of risk. Ducommun Incorporated is currently generating about 0.1 per unit of risk. If you would invest 3,247 in UBS Group AG on November 9, 2024 and sell it today you would earn a total of 92.00 from holding UBS Group AG or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. Ducommun Incorporated
Performance |
| Timeline |
| UBS Group AG |
| Ducommun Incorporated |
UBS Group and Ducommun Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Ducommun Incorporated
The main advantage of trading using opposite UBS Group and Ducommun Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Ducommun Incorporated 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 Ducommun Incorporated will offset losses from the drop in Ducommun Incorporated's long position.| UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
| Ducommun Incorporated vs. Innovative Solutions and | Ducommun Incorporated vs. National Presto Industries | Ducommun Incorporated vs. Astronics | Ducommun Incorporated vs. Park Electrochemical |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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