Correlation Between UBS AG and Vanguard Ultra

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

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

Diversification Opportunities for UBS AG and Vanguard Ultra

0.6

Correlation Coefficient

UBS AG  Vanguard Ultra

Poor diversification

The 3 months correlation between UBS and Vanguard is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London and Vanguard Ultra Short Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Ultra Short and UBS AG 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 AG London are associated (or correlated) with Vanguard Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Ultra Short has no effect on the direction of UBS AG i.e., UBS AG and Vanguard Ultra go up and down completely randomly.

Pair Corralation between UBS AG and Vanguard Ultra

If you would invest  4,951  in Vanguard Ultra Short Bond on October 15, 2024 and sell it today you would earn a total of  14.00  from holding Vanguard Ultra Short Bond or generate 0.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.56%
Values	Daily Returns

UBS AG London  vs.  Vanguard Ultra Short Bond

UBS AG London

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days UBS AG London has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite inconsistent fundamental indicators, UBS AG disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Ultra Short

Risk-Adjusted Performance

44 of 100

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Ultra Short Bond are ranked lower than 44 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Vanguard Ultra is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UBS AG and Vanguard Ultra

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

The idea behind UBS AG London and Vanguard Ultra Short 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.