Correlation Between Aeris Indstria and UBS Group

Can any of the company-specific risk be diversified away by investing in both Aeris Indstria and UBS 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 Aeris Indstria and UBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeris Indstria e and UBS Group AG, you can compare the effects of market volatilities on Aeris Indstria and UBS 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 Aeris Indstria with a short position of UBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Indstria and UBS Group.

Diversification Opportunities for Aeris Indstria and UBS Group

0.0

Correlation Coefficient

Aeris Indstria  UBS Group

Pay attention - limited upside

The 3 months correlation between Aeris and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Indstria e and UBS Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Group AG and Aeris Indstria 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 Aeris Indstria e are associated (or correlated) with UBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Group AG has no effect on the direction of Aeris Indstria i.e., Aeris Indstria and UBS Group go up and down completely randomly.

Pair Corralation between Aeris Indstria and UBS Group

Assuming the 90 days trading horizon Aeris Indstria e is expected to generate 6.41 times more return on investment than UBS Group. However, Aeris Indstria is 6.41 times more volatile than UBS Group AG. It trades about 0.08 of its potential returns per unit of risk. UBS Group AG is currently generating about 0.14 per unit of risk. If you would invest  601.00  in Aeris Indstria e on September 26, 2024 and sell it today you would earn a total of  185.00  from holding Aeris Indstria e or generate 30.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Aeris Indstria e  vs.  UBS Group AG

Aeris Indstria e

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Aeris Indstria e are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Aeris Indstria unveiled solid returns over the last few months and may actually be approaching a breakup point.

UBS Group AG

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Group AG are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UBS Group sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aeris Indstria and UBS Group

The main advantage of trading using opposite Aeris Indstria and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Indstria position performs unexpectedly, UBS 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 UBS Group will offset losses from the drop in UBS Group's long position.

The idea behind Aeris Indstria e and UBS Group AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.