Correlation Between U Blox and Sulzer AG
Can any of the company-specific risk be diversified away by investing in both U Blox and Sulzer AG 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 U Blox and Sulzer AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between U Blox Holding and Sulzer AG, you can compare the effects of market volatilities on U Blox and Sulzer AG 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 U Blox with a short position of Sulzer AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Blox and Sulzer AG.
Diversification Opportunities for U Blox and Sulzer AG
Modest diversification
The 3 months correlation between UBXN and Sulzer is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding U Blox Holding and Sulzer AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sulzer AG and U Blox 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 U Blox Holding are associated (or correlated) with Sulzer AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sulzer AG has no effect on the direction of U Blox i.e., U Blox and Sulzer AG go up and down completely randomly.
Pair Corralation between U Blox and Sulzer AG
Assuming the 90 days trading horizon U Blox Holding is expected to generate 1.24 times more return on investment than Sulzer AG. However, U Blox is 1.24 times more volatile than Sulzer AG. It trades about -0.01 of its potential returns per unit of risk. Sulzer AG is currently generating about -0.19 per unit of risk. If you would invest 6,780 in U Blox Holding on August 29, 2024 and sell it today you would lose (40.00) from holding U Blox Holding or give up 0.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Blox Holding vs. Sulzer AG
Performance |
| Timeline |
| U Blox Holding |
| Sulzer AG |
U Blox and Sulzer AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Blox and Sulzer AG
The main advantage of trading using opposite U Blox and Sulzer AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Blox position performs unexpectedly, Sulzer AG 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 Sulzer AG will offset losses from the drop in Sulzer AG's long position.| U Blox vs. Siegfried Holding | U Blox vs. VAT Group AG | U Blox vs. Lonza Group AG | U Blox vs. Straumann Holding AG |
| Sulzer AG vs. Bucher Industries AG | Sulzer AG vs. Comet Holding AG | Sulzer AG vs. Belimo Holding | Sulzer AG vs. Komax Holding 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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