Correlation Between IShares Govt and UBSFund Solutions

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

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

Diversification Opportunities for IShares Govt and UBSFund Solutions

-0.09

Correlation Coefficient

IShares Govt  UBSFund Solutions

Good diversification

The 3 months correlation between IShares and UBSFund is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding iShares Govt Bond and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and IShares Govt 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 iShares Govt Bond are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of IShares Govt i.e., IShares Govt and UBSFund Solutions go up and down completely randomly.

Pair Corralation between IShares Govt and UBSFund Solutions

Assuming the 90 days trading horizon iShares Govt Bond is expected to under-perform the UBSFund Solutions. But the etf apears to be less risky and, when comparing its historical volatility, iShares Govt Bond is 1.56 times less risky than UBSFund Solutions. The etf trades about -0.04 of its potential returns per unit of risk. The UBSFund Solutions MSCI is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,723  in UBSFund Solutions MSCI on September 12, 2024 and sell it today you would earn a total of  264.00  from holding UBSFund Solutions MSCI or generate 5.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.71%
Values	Daily Returns

iShares Govt Bond  vs.  UBSFund Solutions MSCI

iShares Govt Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

UBSFund Solutions MSCI

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UBSFund Solutions MSCI are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UBSFund Solutions is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares Govt and UBSFund Solutions

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

The idea behind iShares Govt Bond and UBSFund Solutions MSCI 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.