Correlation Between UBSFund Solutions and Invesco MSCI

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

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

Diversification Opportunities for UBSFund Solutions and Invesco MSCI

0.52

Correlation Coefficient

UBSFund Solutions  Invesco MSCI

Very weak diversification

The 3 months correlation between UBSFund and Invesco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Invesco MSCI USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco MSCI USA and UBSFund Solutions 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 UBSFund Solutions MSCI are associated (or correlated) with Invesco MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco MSCI USA has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Invesco MSCI go up and down completely randomly.

Pair Corralation between UBSFund Solutions and Invesco MSCI

Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 2.09 times less return on investment than Invesco MSCI. In addition to that, UBSFund Solutions is 1.73 times more volatile than Invesco MSCI USA. It trades about 0.03 of its total potential returns per unit of risk. Invesco MSCI USA is currently generating about 0.11 per unit of volatility. If you would invest  7,397  in Invesco MSCI USA on October 2, 2024 and sell it today you would earn a total of  1,592  from holding Invesco MSCI USA or generate 21.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.48%
Values	Daily Returns

UBSFund Solutions MSCI  vs.  Invesco MSCI USA

UBSFund Solutions MSCI

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UBSFund Solutions MSCI are ranked lower than 3 (%) 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.

Invesco MSCI USA

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Invesco MSCI USA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Invesco MSCI is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with UBSFund Solutions and Invesco MSCI

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

The idea behind UBSFund Solutions MSCI and Invesco MSCI USA 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.