Correlation Between UBS and VanEck China

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

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

Diversification Opportunities for UBS and VanEck China

0.0

Correlation Coefficient

UBS  VanEck China

Pay attention - limited upside

The 3 months correlation between UBS and VanEck is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UBS and VanEck China Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck China Bond and UBS 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 are associated (or correlated) with VanEck China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck China Bond has no effect on the direction of UBS i.e., UBS and VanEck China go up and down completely randomly.

Pair Corralation between UBS and VanEck China

If you would invest  2,199  in VanEck China Bond on December 29, 2024 and sell it today you would earn a total of  4.00  from holding VanEck China Bond or generate 0.18% return on investment over 90 days.

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

UBS  vs.  VanEck China Bond

UBS

Risk-Adjusted Performance

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 fairly strong technical and fundamental indicators, UBS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

VanEck China Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck China Bond has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, VanEck China is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with UBS and VanEck China

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

The idea behind UBS and VanEck China Bond 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.