Correlation Between UBS Group and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both UBS Group and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on UBS Group and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Zurich Insurance.
Diversification Opportunities for UBS Group and Zurich Insurance
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between UBS and Zurich is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of UBS Group i.e., UBS Group and Zurich Insurance go up and down completely randomly.
Pair Corralation between UBS Group and Zurich Insurance
Assuming the 90 days trading horizon UBS Group AG is expected to generate 1.75 times more return on investment than Zurich Insurance. However, UBS Group is 1.75 times more volatile than Zurich Insurance Group. It trades about 0.09 of its potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.13 per unit of risk. If you would invest 2,360 in UBS Group AG on November 3, 2024 and sell it today you would earn a total of 874.00 from holding UBS Group AG or generate 37.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Group AG vs. Zurich Insurance Group
Performance |
| Timeline |
| UBS Group AG |
| Zurich Insurance |
UBS Group and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Group and Zurich Insurance
The main advantage of trading using opposite UBS Group and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| UBS Group vs. Zurich Insurance Group | UBS Group vs. Novartis AG | UBS Group vs. Swiss Re AG | UBS Group vs. ABB |
| Zurich Insurance vs. Swiss Re AG | Zurich Insurance vs. Novartis AG | Zurich Insurance vs. Swiss Life Holding | Zurich Insurance vs. UBS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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