Correlation Between UBS ETF and Xtrackers Switzerland

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

Diversification Opportunities for UBS ETF and Xtrackers Switzerland

0.97

Correlation Coefficient

UBS ETF  Xtrackers Switzerland

Almost no diversification

The 3 months correlation between UBS and Xtrackers is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and Xtrackers Switzerland UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Switzerland 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 Xtrackers Switzerland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Switzerland has no effect on the direction of UBS ETF i.e., UBS ETF and Xtrackers Switzerland go up and down completely randomly.

Pair Corralation between UBS ETF and Xtrackers Switzerland

Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the Xtrackers Switzerland. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF MSCI is 1.13 times less risky than Xtrackers Switzerland. The etf trades about -0.04 of its potential returns per unit of risk. The Xtrackers Switzerland UCITS is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  13,226  in Xtrackers Switzerland UCITS on December 30, 2024 and sell it today you would lose (56.00) from holding Xtrackers Switzerland UCITS or give up 0.42% of portfolio value over 90 days.

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

UBS ETF MSCI  vs.  Xtrackers Switzerland UCITS

UBS ETF MSCI

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF MSCI are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UBS ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Xtrackers Switzerland

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers Switzerland UCITS are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Xtrackers Switzerland may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with UBS ETF and Xtrackers Switzerland

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

The idea behind UBS ETF MSCI and Xtrackers Switzerland UCITS 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.