Correlation Between VanEck BDC and UBS AG

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

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

Diversification Opportunities for VanEck BDC and UBS AG

0.69

Correlation Coefficient

VanEck BDC  UBS AG

Poor diversification

The 3 months correlation between VanEck and UBS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding VanEck BDC Income and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and VanEck BDC 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 VanEck BDC Income are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of VanEck BDC i.e., VanEck BDC and UBS AG go up and down completely randomly.

Pair Corralation between VanEck BDC and UBS AG

Given the investment horizon of 90 days VanEck BDC is expected to generate 1.31 times less return on investment than UBS AG. But when comparing it to its historical volatility, VanEck BDC Income is 1.06 times less risky than UBS AG. It trades about 0.08 of its potential returns per unit of risk. UBS AG London is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  1,261  in UBS AG London on October 11, 2024 and sell it today you would earn a total of  646.00  from holding UBS AG London or generate 51.23% return on investment over 90 days.

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

VanEck BDC Income  vs.  UBS AG London

VanEck BDC Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck BDC Income are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, VanEck BDC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

UBS AG London

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS AG London are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UBS AG may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with VanEck BDC and UBS AG

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

The idea behind VanEck BDC Income and UBS AG London 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.