Correlation Between Aesapar Fundo and UBS Group

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

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

Diversification Opportunities for Aesapar Fundo and UBS Group

-0.71

Correlation Coefficient

Aesapar Fundo  UBS Group

Pay attention - limited upside

The 3 months correlation between Aesapar and UBS is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Aesapar Fundo de 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 Aesapar Fundo 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 Aesapar Fundo de 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 Aesapar Fundo i.e., Aesapar Fundo and UBS Group go up and down completely randomly.

Pair Corralation between Aesapar Fundo and UBS Group

Assuming the 90 days trading horizon Aesapar Fundo de is expected to under-perform the UBS Group. In addition to that, Aesapar Fundo is 1.29 times more volatile than UBS Group AG. It trades about -0.17 of its total potential returns per unit of risk. UBS Group AG is currently generating about 0.12 per unit of volatility. If you would invest  16,983  in UBS Group AG on September 27, 2024 and sell it today you would earn a total of  1,755  from holding UBS Group AG or generate 10.33% return on investment over 90 days.

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

Aesapar Fundo de  vs.  UBS Group AG

Aesapar Fundo de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aesapar Fundo de has generated negative risk-adjusted returns adding no value to fund investors. Despite weak performance in the last few months, the Fund's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

UBS Group AG

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Group AG are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UBS Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Aesapar Fundo and UBS Group

The main advantage of trading using opposite Aesapar Fundo and UBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aesapar Fundo 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 Aesapar Fundo de 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.