Correlation Between UBS Group and Swiss Life
Can any of the company-specific risk be diversified away by investing in both UBS Group and Swiss Life 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 Swiss Life 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 Swiss Life Holding, you can compare the effects of market volatilities on UBS Group and Swiss Life 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 Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Swiss Life.
Diversification Opportunities for UBS Group and Swiss Life
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Swiss is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding 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 Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of UBS Group i.e., UBS Group and Swiss Life go up and down completely randomly.
Pair Corralation between UBS Group and Swiss Life
Assuming the 90 days trading horizon UBS Group is expected to generate 1.07 times less return on investment than Swiss Life. In addition to that, UBS Group is 2.07 times more volatile than Swiss Life Holding. It trades about 0.03 of its total potential returns per unit of risk. Swiss Life Holding is currently generating about 0.08 per unit of volatility. If you would invest 71,520 in Swiss Life Holding on August 28, 2024 and sell it today you would earn a total of 1,020 from holding Swiss Life Holding or generate 1.43% 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. Swiss Life Holding
Performance |
| Timeline |
| UBS Group AG |
| Swiss Life Holding |
UBS Group and Swiss Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Swiss Life
The main advantage of trading using opposite UBS Group and Swiss Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Swiss Life 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 Swiss Life will offset losses from the drop in Swiss Life's long position.| UBS Group vs. Zurich Insurance Group | UBS Group vs. Novartis AG | UBS Group vs. Swiss Re AG | UBS Group vs. ABB |
| Swiss Life vs. Helvetia Holding AG | Swiss Life vs. Swisscom AG | Swiss Life vs. Zurich Insurance Group | Swiss Life vs. Adecco Group AG |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |