Correlation Between Lyxor BofAML and UBS Fund

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Can any of the company-specific risk be diversified away by investing in both Lyxor BofAML and UBS Fund 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 Lyxor BofAML and UBS Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor BofAML USD and UBS Fund Solutions, you can compare the effects of market volatilities on Lyxor BofAML and UBS Fund 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 Lyxor BofAML with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor BofAML and UBS Fund.

Diversification Opportunities for Lyxor BofAML and UBS Fund

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Lyxor and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor BofAML USD and UBS Fund Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Fund Solutions and Lyxor BofAML 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 Lyxor BofAML USD are associated (or correlated) with UBS Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Fund Solutions has no effect on the direction of Lyxor BofAML i.e., Lyxor BofAML and UBS Fund go up and down completely randomly.

Pair Corralation between Lyxor BofAML and UBS Fund

If you would invest  7,564  in Lyxor BofAML USD on September 9, 2024 and sell it today you would earn a total of  137.00  from holding Lyxor BofAML USD or generate 1.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy1.52%
ValuesDaily Returns

Lyxor BofAML USD  vs.  UBS Fund Solutions

 Performance 
       Timeline  
Lyxor BofAML USD 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Lyxor BofAML USD are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Lyxor BofAML is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
UBS Fund Solutions 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in UBS Fund Solutions are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, UBS Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Lyxor BofAML and UBS Fund Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lyxor BofAML and UBS Fund

The main advantage of trading using opposite Lyxor BofAML and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor BofAML position performs unexpectedly, UBS Fund 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 Fund will offset losses from the drop in UBS Fund's long position.
The idea behind Lyxor BofAML USD and UBS Fund Solutions 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.
Check out your portfolio center.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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