Correlation Between UBS Group and Coltene Holding
Can any of the company-specific risk be diversified away by investing in both UBS Group and Coltene Holding 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 Coltene Holding 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 Coltene Holding AG, you can compare the effects of market volatilities on UBS Group and Coltene Holding 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 Coltene Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Coltene Holding.
Diversification Opportunities for UBS Group and Coltene Holding
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Coltene is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Coltene Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coltene Holding 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 Coltene Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coltene Holding AG has no effect on the direction of UBS Group i.e., UBS Group and Coltene Holding go up and down completely randomly.
Pair Corralation between UBS Group and Coltene Holding
Assuming the 90 days trading horizon UBS Group AG is expected to generate 0.79 times more return on investment than Coltene Holding. However, UBS Group AG is 1.27 times less risky than Coltene Holding. It trades about 0.09 of its potential returns per unit of risk. Coltene Holding AG is currently generating about -0.03 per unit of risk. If you would invest 1,802 in UBS Group AG on August 31, 2024 and sell it today you would earn a total of 1,046 from holding UBS Group AG or generate 58.05% 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. Coltene Holding AG
Performance |
| Timeline |
| UBS Group AG |
| Coltene Holding AG |
UBS Group and Coltene Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Coltene Holding
The main advantage of trading using opposite UBS Group and Coltene Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Coltene Holding 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 Coltene Holding will offset losses from the drop in Coltene Holding's long position.| UBS Group vs. Zurich Insurance Group | UBS Group vs. Novartis AG | UBS Group vs. Swiss Re AG | UBS Group vs. ABB |
| Coltene Holding vs. Jungfraubahn Holding AG | Coltene Holding vs. Amsterdam Commodities NV | Coltene Holding vs. Flow Traders BV | Coltene Holding vs. ForFarmers NV |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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