Correlation Between Ubs Allocation and Ubs International

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

By analyzing existing cross correlation between Ubs Allocation Fund and Ubs International Sustainable, you can compare the effects of market volatilities on Ubs Allocation and Ubs International 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 Allocation with a short position of Ubs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs Allocation and Ubs International.

Diversification Opportunities for Ubs Allocation and Ubs International

-0.06

Correlation Coefficient

Ubs Allocation  Ubs International

Good diversification

The 3 months correlation between Ubs and Ubs is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Allocation Fund and Ubs International Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs International and Ubs Allocation 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 Allocation Fund are associated (or correlated) with Ubs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs International has no effect on the direction of Ubs Allocation i.e., Ubs Allocation and Ubs International go up and down completely randomly.

Pair Corralation between Ubs Allocation and Ubs International

Assuming the 90 days horizon Ubs Allocation Fund is expected to under-perform the Ubs International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ubs Allocation Fund is 1.33 times less risky than Ubs International. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Ubs International Sustainable is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,005  in Ubs International Sustainable on December 27, 2024 and sell it today you would earn a total of  64.00  from holding Ubs International Sustainable or generate 6.37% return on investment over 90 days.

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

Ubs Allocation Fund  vs.  Ubs International Sustainable

Ubs Allocation

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ubs Allocation Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ubs Allocation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ubs International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs International Sustainable are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Ubs International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ubs Allocation and Ubs International

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

The idea behind Ubs Allocation Fund and Ubs International Sustainable 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.