Correlation Between UBS Plc and Ossiam Irl

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

By analyzing existing cross correlation between UBS plc and Ossiam Irl Icav, you can compare the effects of market volatilities on UBS Plc and Ossiam Irl 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 Plc with a short position of Ossiam Irl. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Plc and Ossiam Irl.

Diversification Opportunities for UBS Plc and Ossiam Irl

0.99

Correlation Coefficient

UBS Plc  Ossiam Irl

No risk reduction

The 3 months correlation between UBS and Ossiam is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding UBS plc and Ossiam Irl Icav in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ossiam Irl Icav and UBS Plc 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 plc are associated (or correlated) with Ossiam Irl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ossiam Irl Icav has no effect on the direction of UBS Plc i.e., UBS Plc and Ossiam Irl go up and down completely randomly.

Pair Corralation between UBS Plc and Ossiam Irl

Assuming the 90 days trading horizon UBS plc is expected to generate 1.14 times more return on investment than Ossiam Irl. However, UBS Plc is 1.14 times more volatile than Ossiam Irl Icav. It trades about 0.0 of its potential returns per unit of risk. Ossiam Irl Icav is currently generating about -0.15 per unit of risk. If you would invest  9,229  in UBS plc on September 25, 2024 and sell it today you would lose (5.00) from holding UBS plc or give up 0.05% of portfolio value over 90 days.

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

UBS plc   vs.  Ossiam Irl Icav

UBS plc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBS plc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, UBS Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ossiam Irl Icav

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ossiam Irl Icav are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Ossiam Irl may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UBS Plc and Ossiam Irl

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

The idea behind UBS plc and Ossiam Irl Icav 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.