Correlation Between UBSFund Solutions and VanEck Sustainable

Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and VanEck Sustainable 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 VanEck Sustainable 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 VanEck Sustainable World, you can compare the effects of market volatilities on UBSFund Solutions and VanEck Sustainable 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 VanEck Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and VanEck Sustainable.

Diversification Opportunities for UBSFund Solutions and VanEck Sustainable

0.7

Correlation Coefficient

UBSFund Solutions  VanEck Sustainable

Poor diversification

The 3 months correlation between UBSFund and VanEck is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and VanEck Sustainable World in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Sustainable World 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 VanEck Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Sustainable World has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and VanEck Sustainable go up and down completely randomly.

Pair Corralation between UBSFund Solutions and VanEck Sustainable

Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 1.07 times less return on investment than VanEck Sustainable. In addition to that, UBSFund Solutions is 2.15 times more volatile than VanEck Sustainable World. It trades about 0.09 of its total potential returns per unit of risk. VanEck Sustainable World is currently generating about 0.21 per unit of volatility. If you would invest  2,984  in VanEck Sustainable World on September 13, 2024 and sell it today you would earn a total of  196.00  from holding VanEck Sustainable World or generate 6.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

UBSFund Solutions MSCI  vs.  VanEck Sustainable World

UBSFund Solutions MSCI

Risk-Adjusted Performance

7 of 100

OK

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 newest stock price disturbance, may contribute to short-term losses for the investors.

VanEck Sustainable World

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Sustainable World are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, VanEck Sustainable may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UBSFund Solutions and VanEck Sustainable

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

The idea behind UBSFund Solutions MSCI and VanEck Sustainable World 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.