Correlation Between UBS ETF and UBS Vitainvest

Can any of the company-specific risk be diversified away by investing in both UBS ETF and UBS Vitainvest 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 UBS Vitainvest 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 UBS Vitainvest , you can compare the effects of market volatilities on UBS ETF and UBS Vitainvest 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 UBS Vitainvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and UBS Vitainvest.

Diversification Opportunities for UBS ETF and UBS Vitainvest

0.93

Correlation Coefficient

UBS ETF  UBS Vitainvest

Almost no diversification

The 3 months correlation between UBS and UBS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and UBS Vitainvest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Vitainvest 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 UBS Vitainvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Vitainvest has no effect on the direction of UBS ETF i.e., UBS ETF and UBS Vitainvest go up and down completely randomly.

Pair Corralation between UBS ETF and UBS Vitainvest

Assuming the 90 days trading horizon UBS ETF MSCI is expected to generate 1.76 times more return on investment than UBS Vitainvest. However, UBS ETF is 1.76 times more volatile than UBS Vitainvest . It trades about 0.21 of its potential returns per unit of risk. UBS Vitainvest is currently generating about 0.16 per unit of risk. If you would invest  1,949  in UBS ETF MSCI on December 23, 2024 and sell it today you would earn a total of  161.00  from holding UBS ETF MSCI or generate 8.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	96.67%
Values	Daily Returns

UBS ETF MSCI  vs.  UBS Vitainvest

UBS ETF MSCI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF MSCI are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, UBS ETF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

UBS Vitainvest

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Vitainvest are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, UBS Vitainvest is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with UBS ETF and UBS Vitainvest

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

The idea behind UBS ETF MSCI and UBS Vitainvest 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.