Correlation Between Ypsomed Holding and ABB

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

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

Diversification Opportunities for Ypsomed Holding and ABB

0.41

Correlation Coefficient

Ypsomed Holding  ABB

Very weak diversification

The 3 months correlation between Ypsomed and ABB is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ypsomed Holding AG and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB and Ypsomed Holding 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 Ypsomed Holding AG are associated (or correlated) with ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Ypsomed Holding i.e., Ypsomed Holding and ABB go up and down completely randomly.

Pair Corralation between Ypsomed Holding and ABB

Assuming the 90 days trading horizon Ypsomed Holding AG is expected to generate 0.78 times more return on investment than ABB. However, Ypsomed Holding AG is 1.28 times less risky than ABB. It trades about 0.26 of its potential returns per unit of risk. ABB is currently generating about 0.18 per unit of risk. If you would invest  33,511  in Ypsomed Holding AG on April 24, 2025 and sell it today you would earn a total of  8,839  from holding Ypsomed Holding AG or generate 26.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.39%
Values	Daily Returns

Ypsomed Holding AG  vs.  ABB

Ypsomed Holding AG

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ypsomed Holding AG are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Ypsomed Holding showed solid returns over the last few months and may actually be approaching a breakup point.

ABB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ABB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ABB showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ypsomed Holding and ABB

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

The idea behind Ypsomed Holding AG and ABB 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.