Correlation Between Ubs Money and Growth Opportunities

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

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

Diversification Opportunities for Ubs Money and Growth Opportunities

0.0

Correlation Coefficient

Ubs Money  Growth Opportunities

Pay attention - limited upside

The 3 months correlation between Ubs and Growth is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Money Series and Growth Opportunities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Opportunities and Ubs Money 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 Money Series are associated (or correlated) with Growth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Opportunities has no effect on the direction of Ubs Money i.e., Ubs Money and Growth Opportunities go up and down completely randomly.

Pair Corralation between Ubs Money and Growth Opportunities

Assuming the 90 days horizon Ubs Money is expected to generate 5.27 times less return on investment than Growth Opportunities. But when comparing it to its historical volatility, Ubs Money Series is 1.12 times less risky than Growth Opportunities. It trades about 0.02 of its potential returns per unit of risk. Growth Opportunities Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3,034  in Growth Opportunities Fund on October 10, 2024 and sell it today you would earn a total of  2,088  from holding Growth Opportunities Fund or generate 68.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Ubs Money Series  vs.  Growth Opportunities Fund

Ubs Money Series

Risk-Adjusted Performance

0 of 100

Very Weak

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

Growth Opportunities

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Growth Opportunities Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Growth Opportunities 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 Money and Growth Opportunities

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

The idea behind Ubs Money Series and Growth Opportunities Fund 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.