Correlation Between IPath Bloomberg and UBS

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

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

Diversification Opportunities for IPath Bloomberg and UBS

0.0

Correlation Coefficient

IPath Bloomberg  UBS

Pay attention - limited upside

The 3 months correlation between IPath and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding iPath Bloomberg Commodity and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and IPath Bloomberg 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 iPath Bloomberg Commodity 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 IPath Bloomberg i.e., IPath Bloomberg and UBS go up and down completely randomly.

Pair Corralation between IPath Bloomberg and UBS

If you would invest (100.00) in UBS on September 22, 2024 and sell it today you would earn a total of  100.00  from holding UBS or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

iPath Bloomberg Commodity  vs.  UBS

iPath Bloomberg Commodity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iPath Bloomberg Commodity has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking indicators, IPath Bloomberg is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail 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. Despite fairly strong fundamental indicators, UBS is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with IPath Bloomberg and UBS

The main advantage of trading using opposite IPath Bloomberg and UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Bloomberg 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 iPath Bloomberg Commodity 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.