Correlation Between UBS Money and Cap ISR

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

By analyzing existing cross correlation between UBS Money Market and Cap ISR Actions, you can compare the effects of market volatilities on UBS Money and Cap ISR 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 Cap ISR. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Money and Cap ISR.

Diversification Opportunities for UBS Money and Cap ISR

-0.74

Correlation Coefficient

UBS Money  Cap ISR

Pay attention - limited upside

The 3 months correlation between UBS and Cap is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding UBS Money Market and Cap ISR Actions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cap ISR Actions 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 Market are associated (or correlated) with Cap ISR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cap ISR Actions has no effect on the direction of UBS Money i.e., UBS Money and Cap ISR go up and down completely randomly.

Pair Corralation between UBS Money and Cap ISR

Assuming the 90 days trading horizon UBS Money Market is expected to generate 0.49 times more return on investment than Cap ISR. However, UBS Money Market is 2.04 times less risky than Cap ISR. It trades about 0.13 of its potential returns per unit of risk. Cap ISR Actions is currently generating about -0.02 per unit of risk. If you would invest  184,106  in UBS Money Market on September 22, 2024 and sell it today you would earn a total of  10,798  from holding UBS Money Market or generate 5.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

UBS Money Market  vs.  Cap ISR Actions

UBS Money Market

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Money Market are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather weak technical and fundamental indicators, UBS Money may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Cap ISR Actions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cap ISR Actions has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Cap ISR 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 Cap ISR

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

The idea behind UBS Money Market and Cap ISR Actions 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.