Correlation Between IShares UBS and ETFS ROBO

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

By analyzing existing cross correlation between iShares UBS Government and ETFS ROBO Global, you can compare the effects of market volatilities on IShares UBS and ETFS ROBO 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 UBS with a short position of ETFS ROBO. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares UBS and ETFS ROBO.

Diversification Opportunities for IShares UBS and ETFS ROBO

0.31

Correlation Coefficient

IShares UBS  ETFS ROBO

Weak diversification

The 3 months correlation between IShares and ETFS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding iShares UBS Government and ETFS ROBO Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETFS ROBO Global and IShares 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 iShares UBS Government are associated (or correlated) with ETFS ROBO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETFS ROBO Global has no effect on the direction of IShares UBS i.e., IShares UBS and ETFS ROBO go up and down completely randomly.

Pair Corralation between IShares UBS and ETFS ROBO

Assuming the 90 days trading horizon iShares UBS Government is expected to generate 0.34 times more return on investment than ETFS ROBO. However, iShares UBS Government is 2.93 times less risky than ETFS ROBO. It trades about -0.02 of its potential returns per unit of risk. ETFS ROBO Global is currently generating about -0.09 per unit of risk. If you would invest  12,393  in iShares UBS Government on December 30, 2024 and sell it today you would lose (55.00) from holding iShares UBS Government or give up 0.44% of portfolio value over 90 days.

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

iShares UBS Government  vs.  ETFS ROBO Global

iShares UBS Government

Risk-Adjusted Performance

Very Weak

Over the last 90 days iShares UBS Government has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, IShares UBS is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ETFS ROBO Global

Risk-Adjusted Performance

Very Weak

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

Pair Trading with IShares UBS and ETFS ROBO

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

The idea behind iShares UBS Government and ETFS ROBO Global 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.