Correlation Between Global X and UBS

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

By analyzing existing cross correlation between Global X MLP and UBS, you can compare the effects of market volatilities on Global X and UBS 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 Global X with a short position of UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and UBS.

Diversification Opportunities for Global X and UBS

0.46

Correlation Coefficient

Global X  UBS

Very weak diversification

The 3 months correlation between Global and UBS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and Global X 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 Global X MLP are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of Global X i.e., Global X and UBS go up and down completely randomly.

Pair Corralation between Global X and UBS

If you would invest  4,662  in Global X MLP on September 5, 2024 and sell it today you would earn a total of  521.00  from holding Global X MLP or generate 11.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Global X MLP  vs.  UBS

Global X MLP

Risk-Adjusted Performance

16 of 100

Solid

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

UBS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, UBS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Global X and UBS

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

The idea behind Global X MLP and UBS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.