Correlation Between IShares UK and UBS ETF

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

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

Diversification Opportunities for IShares UK and UBS ETF

-0.74

Correlation Coefficient

IShares UK  UBS ETF

Pay attention - limited upside

The 3 months correlation between IShares and UBS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding iShares UK Property and UBS ETF plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF plc and IShares UK 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 UK Property are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF plc has no effect on the direction of IShares UK i.e., IShares UK and UBS ETF go up and down completely randomly.

Pair Corralation between IShares UK and UBS ETF

Assuming the 90 days trading horizon IShares UK is expected to generate 2.44 times less return on investment than UBS ETF. In addition to that, IShares UK is 4.75 times more volatile than UBS ETF plc. It trades about 0.01 of its total potential returns per unit of risk. UBS ETF plc is currently generating about 0.14 per unit of volatility. If you would invest  1,942  in UBS ETF plc on September 14, 2024 and sell it today you would earn a total of  498.00  from holding UBS ETF plc or generate 25.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.63%
Values	Daily Returns

iShares UK Property  vs.  UBS ETF plc

iShares UK Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares UK Property has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Etf's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the fund sophisticated investors.

UBS ETF plc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF plc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, UBS ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IShares UK and UBS ETF

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

The idea behind iShares UK Property and UBS ETF plc 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.