Correlation Between UBSFund Solutions and UBS ETF

Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions 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 UBSFund Solutions and UBS ETF 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 UBS ETF plc, you can compare the effects of market volatilities on UBSFund Solutions 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 UBSFund Solutions with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and UBS ETF.

Diversification Opportunities for UBSFund Solutions and UBS ETF

-0.1

Correlation Coefficient

UBSFund Solutions  UBS ETF

Good diversification

The 3 months correlation between UBSFund and UBS is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI 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 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 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 UBSFund Solutions i.e., UBSFund Solutions and UBS ETF go up and down completely randomly.

Pair Corralation between UBSFund Solutions and UBS ETF

Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to generate 1.16 times more return on investment than UBS ETF. However, UBSFund Solutions is 1.16 times more volatile than UBS ETF plc. It trades about 0.0 of its potential returns per unit of risk. UBS ETF plc is currently generating about -0.12 per unit of risk. If you would invest  4,911  in UBSFund Solutions MSCI on December 30, 2024 and sell it today you would lose (26.00) from holding UBSFund Solutions MSCI or give up 0.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

UBSFund Solutions MSCI  vs.  UBS ETF plc

UBSFund Solutions MSCI

Risk-Adjusted Performance

Very Weak

Over the last 90 days UBSFund Solutions MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

UBS ETF plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days UBS ETF plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with UBSFund Solutions and UBS ETF

The main advantage of trading using opposite UBSFund Solutions and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions 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 UBSFund Solutions MSCI 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.