Correlation Between UBS Group and Calida Holding

Can any of the company-specific risk be diversified away by investing in both UBS Group and Calida Holding 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 Calida Holding 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 Calida Holding AG, you can compare the effects of market volatilities on UBS Group and Calida Holding 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 Calida Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Calida Holding.

Diversification Opportunities for UBS Group and Calida Holding

-0.68

Correlation Coefficient

UBS Group  Calida Holding

Excellent diversification

The 3 months correlation between UBS and Calida is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Calida Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calida Holding AG 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 Calida Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calida Holding AG has no effect on the direction of UBS Group i.e., UBS Group and Calida Holding go up and down completely randomly.

Pair Corralation between UBS Group and Calida Holding

Assuming the 90 days trading horizon UBS Group AG is expected to generate 0.48 times more return on investment than Calida Holding. However, UBS Group AG is 2.06 times less risky than Calida Holding. It trades about 0.08 of its potential returns per unit of risk. Calida Holding AG is currently generating about -0.12 per unit of risk. If you would invest  2,807  in UBS Group AG on September 16, 2024 and sell it today you would earn a total of  41.00  from holding UBS Group AG or generate 1.46% return on investment over 90 days.

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

UBS Group AG  vs.  Calida Holding AG

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. In spite of fairly weak basic indicators, UBS Group showed solid returns over the last few months and may actually be approaching a breakup point.

Calida Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calida Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with UBS Group and Calida Holding

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

The idea behind UBS Group AG and Calida Holding 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..