Correlation Between Ubs Engage and Alliancebernstein

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

By analyzing existing cross correlation between Ubs Engage For and Alliancebernstein Global High, you can compare the effects of market volatilities on Ubs Engage and Alliancebernstein 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 Engage with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs Engage and Alliancebernstein.

Diversification Opportunities for Ubs Engage and Alliancebernstein

0.46

Correlation Coefficient

Ubs Engage  Alliancebernstein

Very weak diversification

The 3 months correlation between Ubs and Alliancebernstein is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Engage For and Alliancebernstein Global High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Ubs Engage 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 Engage For are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Ubs Engage i.e., Ubs Engage and Alliancebernstein go up and down completely randomly.

Pair Corralation between Ubs Engage and Alliancebernstein

Assuming the 90 days horizon Ubs Engage For is expected to generate 2.2 times more return on investment than Alliancebernstein. However, Ubs Engage is 2.2 times more volatile than Alliancebernstein Global High. It trades about -0.04 of its potential returns per unit of risk. Alliancebernstein Global High is currently generating about -0.14 per unit of risk. If you would invest  1,346  in Ubs Engage For on September 20, 2024 and sell it today you would lose (33.00) from holding Ubs Engage For or give up 2.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ubs Engage For  vs.  Alliancebernstein Global High

Ubs Engage For

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Ubs Engage For has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ubs Engage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Alliancebernstein

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alliancebernstein Global High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Alliancebernstein is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ubs Engage and Alliancebernstein

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

The idea behind Ubs Engage For and Alliancebernstein Global High 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.