Correlation Between Expat Poland and UBS Fund

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

By analyzing existing cross correlation between Expat Poland WIG20 and UBS Fund Solutions, you can compare the effects of market volatilities on Expat Poland 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 Expat Poland with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expat Poland and UBS Fund.

Diversification Opportunities for Expat Poland and UBS Fund

0.15

Correlation Coefficient

Expat Poland  UBS Fund

Average diversification

The 3 months correlation between Expat and UBS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Expat Poland WIG20 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 Expat Poland 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 Expat Poland WIG20 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 Expat Poland i.e., Expat Poland and UBS Fund go up and down completely randomly.

Pair Corralation between Expat Poland and UBS Fund

Assuming the 90 days horizon Expat Poland is expected to generate 2.44 times less return on investment than UBS Fund. In addition to that, Expat Poland is 2.62 times more volatile than UBS Fund Solutions. It trades about 0.01 of its total potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.09 per unit of volatility. If you would invest  4,969  in UBS Fund Solutions on September 17, 2024 and sell it today you would earn a total of  282.00  from holding UBS Fund Solutions or generate 5.68% return on investment over 90 days.

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

Expat Poland WIG20  vs.  UBS Fund Solutions

Expat Poland WIG20

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Expat Poland WIG20 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Expat Poland 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

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Fund Solutions are ranked lower than 6 (%) 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Expat Poland and UBS Fund

The main advantage of trading using opposite Expat Poland and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expat Poland 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 Expat Poland WIG20 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.