Correlation Between UBS Money and UBS Institutional

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

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

Diversification Opportunities for UBS Money and UBS Institutional

0.0

Correlation Coefficient

UBS Money  UBS Institutional

Pay attention - limited upside

The 3 months correlation between UBS and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UBS Money Market and UBS Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Institutional and UBS Money 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 Money Market are associated (or correlated) with UBS Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Institutional has no effect on the direction of UBS Money i.e., UBS Money and UBS Institutional go up and down completely randomly.

Pair Corralation between UBS Money and UBS Institutional

If you would invest (100.00) in UBS Money Market on October 7, 2024 and sell it today you would earn a total of  100.00  from holding UBS Money Market or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

UBS Money Market  vs.  UBS Institutional

UBS Money Market

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS Money Market has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, UBS Money is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

UBS Institutional

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days UBS Institutional has generated negative risk-adjusted returns adding no value to fund investors. Despite fairly abnormal forward indicators, UBS Institutional may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with UBS Money and UBS Institutional

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

The idea behind UBS Money Market and UBS Institutional 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.