Correlation Between Nasdaq and UBSFund Solutions

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

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

Diversification Opportunities for Nasdaq and UBSFund Solutions

-0.73

Correlation Coefficient

Nasdaq  UBSFund Solutions

Pay attention - limited upside

The 3 months correlation between Nasdaq and UBSFund is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Nasdaq 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 Nasdaq Inc are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Nasdaq i.e., Nasdaq and UBSFund Solutions go up and down completely randomly.

Pair Corralation between Nasdaq and UBSFund Solutions

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the UBSFund Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Nasdaq Inc is 1.12 times less risky than UBSFund Solutions. The stock trades about -0.22 of its potential returns per unit of risk. The UBSFund Solutions MSCI is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  1,370  in UBSFund Solutions MSCI on September 28, 2024 and sell it today you would lose (24.00) from holding UBSFund Solutions MSCI or give up 1.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nasdaq Inc  vs.  UBSFund Solutions MSCI

Nasdaq Inc

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

UBSFund Solutions MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBSFund Solutions MSCI 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 latest fuss on Wall Street may also be a sign of long-term gains for the fund sophisticated investors.

Pair Trading with Nasdaq and UBSFund Solutions

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

The idea behind Nasdaq Inc and UBSFund Solutions MSCI 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.