Correlation Between UBS ETF and Swiss Life

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

By analyzing existing cross correlation between UBS ETF MSCI and Swiss Life Holding, you can compare the effects of market volatilities on UBS ETF and Swiss Life 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 ETF with a short position of Swiss Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and Swiss Life.

Diversification Opportunities for UBS ETF and Swiss Life

0.91

Correlation Coefficient

UBS ETF  Swiss Life

Almost no diversification

The 3 months correlation between UBS and Swiss is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and Swiss Life Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swiss Life Holding and UBS ETF 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 ETF MSCI are associated (or correlated) with Swiss Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swiss Life Holding has no effect on the direction of UBS ETF i.e., UBS ETF and Swiss Life go up and down completely randomly.

Pair Corralation between UBS ETF and Swiss Life

Assuming the 90 days trading horizon UBS ETF is expected to generate 1.79 times less return on investment than Swiss Life. But when comparing it to its historical volatility, UBS ETF MSCI is 1.16 times less risky than Swiss Life. It trades about 0.12 of its potential returns per unit of risk. Swiss Life Holding is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  76,543  in Swiss Life Holding on April 24, 2025 and sell it today you would earn a total of  6,417  from holding Swiss Life Holding or generate 8.38% return on investment over 90 days.

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

UBS ETF MSCI  vs.  Swiss Life Holding

UBS ETF MSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF MSCI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UBS ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Swiss Life Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swiss Life Holding are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Swiss Life may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with UBS ETF and Swiss Life

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

The idea behind UBS ETF MSCI and Swiss Life Holding 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.