Correlation Between Ubs All and Ubs Us

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

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

Diversification Opportunities for Ubs All and Ubs Us

0.73

Correlation Coefficient

Ubs All  Ubs Us

Poor diversification

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

Pair Corralation between Ubs All and Ubs Us

Assuming the 90 days horizon Ubs All China is expected to generate 1.14 times more return on investment than Ubs Us. However, Ubs All is 1.14 times more volatile than Ubs Allocation Fund. It trades about 0.13 of its potential returns per unit of risk. Ubs Allocation Fund is currently generating about 0.14 per unit of risk. If you would invest  375.00  in Ubs All China on August 30, 2024 and sell it today you would earn a total of  19.00  from holding Ubs All China or generate 5.07% return on investment over 90 days.

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

Ubs All China  vs.  Ubs Allocation Fund

Ubs All China

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs All China are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ubs All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ubs Allocation

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs Allocation Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ubs Us 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 All and Ubs Us

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

The idea behind Ubs All China and Ubs Allocation 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.