Correlation Between BlackRock Global and UBS Money

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

By analyzing existing cross correlation between BlackRock Global Funds and UBS Money Market, you can compare the effects of market volatilities on BlackRock Global and UBS Money 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 BlackRock Global with a short position of UBS Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Global and UBS Money.

Diversification Opportunities for BlackRock Global and UBS Money

-0.3

Correlation Coefficient

BlackRock Global  UBS Money

Very good diversification

The 3 months correlation between BlackRock and UBS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Global Funds and UBS Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Money Market and BlackRock Global 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 BlackRock Global Funds are associated (or correlated) with UBS Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Money Market has no effect on the direction of BlackRock Global i.e., BlackRock Global and UBS Money go up and down completely randomly.

Pair Corralation between BlackRock Global and UBS Money

Assuming the 90 days trading horizon BlackRock Global Funds is expected to under-perform the UBS Money. In addition to that, BlackRock Global is 2.03 times more volatile than UBS Money Market. It trades about -0.05 of its total potential returns per unit of risk. UBS Money Market is currently generating about 0.31 per unit of volatility. If you would invest  191,269  in UBS Money Market on October 11, 2024 and sell it today you would earn a total of  5,459  from holding UBS Money Market or generate 2.85% return on investment over 90 days.

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

BlackRock Global Funds  vs.  UBS Money Market

BlackRock Global Funds

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BlackRock Global Funds has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, BlackRock Global is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

UBS Money Market

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Money Market are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, UBS Money may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with BlackRock Global and UBS Money

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

The idea behind BlackRock Global Funds and UBS Money Market 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.

Check out your portfolio center.

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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.