Correlation Between UBS Group and Adecco Group
Can any of the company-specific risk be diversified away by investing in both UBS Group and Adecco 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 UBS Group and Adecco Group 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 Adecco Group AG, you can compare the effects of market volatilities on UBS Group and Adecco 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 UBS Group with a short position of Adecco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Adecco Group.
Diversification Opportunities for UBS Group and Adecco Group
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Adecco is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG 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 Adecco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group AG has no effect on the direction of UBS Group i.e., UBS Group and Adecco Group go up and down completely randomly.
Pair Corralation between UBS Group and Adecco Group
Assuming the 90 days trading horizon UBS Group AG is expected to generate 0.99 times more return on investment than Adecco Group. However, UBS Group AG is 1.01 times less risky than Adecco Group. It trades about 0.13 of its potential returns per unit of risk. Adecco Group AG is currently generating about -0.28 per unit of risk. If you would invest 2,806 in UBS Group AG on October 26, 2024 and sell it today you would earn a total of 364.00 from holding UBS Group AG or generate 12.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. Adecco Group AG
Performance |
| Timeline |
| UBS Group AG |
| Adecco Group AG |
UBS Group and Adecco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Adecco Group
The main advantage of trading using opposite UBS Group and Adecco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Adecco 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 Adecco Group will offset losses from the drop in Adecco Group's long position.| UBS Group vs. Zurich Insurance Group | UBS Group vs. Novartis AG | UBS Group vs. Swiss Re AG | UBS Group vs. ABB |
| Adecco Group vs. Swisscom AG | Adecco Group vs. Swiss Life Holding | Adecco Group vs. Swiss Re AG | Adecco Group vs. ABB |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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