Correlation Between UBS ETF and Amundi Index

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

Diversification Opportunities for UBS ETF and Amundi Index

-0.54

Correlation Coefficient

UBS ETF  Amundi Index

Excellent diversification

The 3 months correlation between UBS and Amundi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and Amundi Index Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi Index Solutions 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 Amundi Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi Index Solutions has no effect on the direction of UBS ETF i.e., UBS ETF and Amundi Index go up and down completely randomly.

Pair Corralation between UBS ETF and Amundi Index

Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the Amundi Index. In addition to that, UBS ETF is 1.15 times more volatile than Amundi Index Solutions. It trades about -0.05 of its total potential returns per unit of risk. Amundi Index Solutions is currently generating about 0.23 per unit of volatility. If you would invest  10,880  in Amundi Index Solutions on September 12, 2024 and sell it today you would earn a total of  1,006  from holding Amundi Index Solutions or generate 9.25% return on investment over 90 days.

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

UBS ETF MSCI  vs.  Amundi Index Solutions

UBS ETF MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS ETF MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, UBS ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Amundi Index Solutions

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amundi Index Solutions are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Amundi Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UBS ETF and Amundi Index

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

The idea behind UBS ETF MSCI and Amundi Index Solutions 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.