Correlation Between UBSFund Solutions and Xtrackers MSCI

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

By analyzing existing cross correlation between UBSFund Solutions MSCI and Xtrackers MSCI Emerging, you can compare the effects of market volatilities on UBSFund Solutions and Xtrackers MSCI 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 UBSFund Solutions with a short position of Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Xtrackers MSCI.

Diversification Opportunities for UBSFund Solutions and Xtrackers MSCI

0.62

Correlation Coefficient

UBSFund Solutions  Xtrackers MSCI

Poor diversification

The 3 months correlation between UBSFund and Xtrackers is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Xtrackers MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI Emerging and UBSFund Solutions 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 UBSFund Solutions MSCI are associated (or correlated) with Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI Emerging has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Xtrackers MSCI go up and down completely randomly.

Pair Corralation between UBSFund Solutions and Xtrackers MSCI

Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to generate 0.72 times more return on investment than Xtrackers MSCI. However, UBSFund Solutions MSCI is 1.38 times less risky than Xtrackers MSCI. It trades about 0.14 of its potential returns per unit of risk. Xtrackers MSCI Emerging is currently generating about 0.1 per unit of risk. If you would invest  2,672  in UBSFund Solutions MSCI on September 28, 2024 and sell it today you would earn a total of  47.00  from holding UBSFund Solutions MSCI or generate 1.76% return on investment over 90 days.

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

UBSFund Solutions MSCI  vs.  Xtrackers MSCI Emerging

UBSFund Solutions MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBSFund Solutions MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, UBSFund Solutions is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Xtrackers MSCI Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xtrackers MSCI Emerging has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Xtrackers MSCI is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with UBSFund Solutions and Xtrackers MSCI

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

The idea behind UBSFund Solutions MSCI and Xtrackers MSCI Emerging 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..