Correlation Between UBS ETF and ZKB Silver

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

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

Diversification Opportunities for UBS ETF and ZKB Silver

0.78

Correlation Coefficient

UBS ETF  ZKB Silver

Poor diversification

The 3 months correlation between UBS and ZKB is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF Palladium and ZKB Silver ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Silver ETF and UBS ETF 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 UBS ETF Palladium are associated (or correlated) with ZKB Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Silver ETF has no effect on the direction of UBS ETF i.e., UBS ETF and ZKB Silver go up and down completely randomly.

Pair Corralation between UBS ETF and ZKB Silver

Assuming the 90 days trading horizon UBS ETF Palladium is expected to under-perform the ZKB Silver. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF Palladium is 1.4 times less risky than ZKB Silver. The etf trades about -0.2 of its potential returns per unit of risk. The ZKB Silver ETF is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  15,560  in ZKB Silver ETF on September 30, 2024 and sell it today you would lose (578.00) from holding ZKB Silver ETF or give up 3.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.74%
Values	Daily Returns

UBS ETF Palladium  vs.  ZKB Silver ETF

UBS ETF Palladium

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS ETF Palladium 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.

ZKB Silver ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ZKB Silver ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, ZKB Silver is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with UBS ETF and ZKB Silver

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

The idea behind UBS ETF Palladium and ZKB Silver ETF 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 Commodity Directory module to find actively traded commodities issued by global exchanges.