Correlation Between VanEck Energy and UBS AG
Can any of the company-specific risk be diversified away by investing in both VanEck Energy and UBS AG 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 Energy and UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Energy Income and UBS AG London, you can compare the effects of market volatilities on VanEck Energy and UBS AG 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 Energy with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Energy and UBS AG.
Diversification Opportunities for VanEck Energy and UBS AG
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VanEck and UBS is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Energy Income and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and VanEck Energy 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 Energy Income are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of VanEck Energy i.e., VanEck Energy and UBS AG go up and down completely randomly.
Pair Corralation between VanEck Energy and UBS AG
Given the investment horizon of 90 days VanEck Energy is expected to generate 1.52 times less return on investment than UBS AG. In addition to that, VanEck Energy is 1.01 times more volatile than UBS AG London. It trades about 0.09 of its total potential returns per unit of risk. UBS AG London is currently generating about 0.14 per unit of volatility. If you would invest 2,693 in UBS AG London on December 2, 2024 and sell it today you would earn a total of 84.00 from holding UBS AG London or generate 3.12% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
VanEck Energy Income vs. UBS AG London
Performance |
Timeline |
VanEck Energy Income |
UBS AG London |
VanEck Energy and UBS AG Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with VanEck Energy and UBS AG
The main advantage of trading using opposite VanEck Energy and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Energy position performs unexpectedly, UBS AG 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 AG will offset losses from the drop in UBS AG's long position.VanEck Energy vs. Alerian Energy Infrastructure | VanEck Energy vs. Tortoise North American | VanEck Energy vs. VanEck Oil Refiners | VanEck Energy vs. Global X MLP |
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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 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.
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