Correlation Between VanEck Oil and UBS

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

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

Diversification Opportunities for VanEck Oil and UBS

-0.9

Correlation Coefficient

VanEck Oil  UBS

Pay attention - limited upside

The 3 months correlation between VanEck and UBS is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Oil Refiners and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and VanEck Oil 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 Oil Refiners are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of VanEck Oil i.e., VanEck Oil and UBS go up and down completely randomly.

Pair Corralation between VanEck Oil and UBS

If you would invest  2,156  in UBS on September 13, 2024 and sell it today you would earn a total of  0.00  from holding UBS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

VanEck Oil Refiners  vs.  UBS

VanEck Oil Refiners

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VanEck Oil Refiners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

UBS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, UBS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with VanEck Oil and UBS

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

The idea behind VanEck Oil Refiners and UBS 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.