Correlation Between UBS Group and MPLX LP
Can any of the company-specific risk be diversified away by investing in both UBS Group and MPLX LP 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 MPLX LP 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 MPLX LP, you can compare the effects of market volatilities on UBS Group and MPLX LP 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 MPLX LP. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and MPLX LP.
Diversification Opportunities for UBS Group and MPLX LP
Very weak diversification
The 3 months correlation between UBS and MPLX is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and MPLX LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPLX LP 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 MPLX LP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPLX LP has no effect on the direction of UBS Group i.e., UBS Group and MPLX LP go up and down completely randomly.
Pair Corralation between UBS Group and MPLX LP
Considering the 90-day investment horizon UBS Group AG is expected to generate 2.24 times more return on investment than MPLX LP. However, UBS Group is 2.24 times more volatile than MPLX LP. It trades about 0.09 of its potential returns per unit of risk. MPLX LP is currently generating about 0.16 per unit of risk. If you would invest 1,814 in UBS Group AG on November 1, 2024 and sell it today you would earn a total of 1,747 from holding UBS Group AG or generate 96.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. MPLX LP
Performance |
| Timeline |
| UBS Group AG |
| MPLX LP |
UBS Group and MPLX LP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and MPLX LP
The main advantage of trading using opposite UBS Group and MPLX LP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, MPLX LP 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 MPLX LP will offset losses from the drop in MPLX LP's long position.| UBS Group vs. Citigroup | UBS Group vs. Barclays PLC ADR | UBS Group vs. HSBC Holdings PLC | UBS Group vs. Nu Holdings |
| MPLX LP vs. ONEOK Inc | MPLX LP vs. Enterprise Products Partners | MPLX LP vs. Energy Transfer LP | MPLX LP vs. Plains All American |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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