Correlation Between United Hero and BCAP MSCI

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

By analyzing existing cross correlation between United Hero ETF and BCAP MSCI Thailand, you can compare the effects of market volatilities on United Hero and BCAP MSCI 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 United Hero with a short position of BCAP MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Hero and BCAP MSCI.

Diversification Opportunities for United Hero and BCAP MSCI

-0.17

Correlation Coefficient

United Hero  BCAP MSCI

Good diversification

The 3 months correlation between United and BCAP is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding United Hero ETF and BCAP MSCI Thailand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCAP MSCI Thailand and United Hero 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 United Hero ETF are associated (or correlated) with BCAP MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCAP MSCI Thailand has no effect on the direction of United Hero i.e., United Hero and BCAP MSCI go up and down completely randomly.

Pair Corralation between United Hero and BCAP MSCI

Assuming the 90 days trading horizon United Hero ETF is expected to generate 2.62 times more return on investment than BCAP MSCI. However, United Hero is 2.62 times more volatile than BCAP MSCI Thailand. It trades about 0.15 of its potential returns per unit of risk. BCAP MSCI Thailand is currently generating about 0.06 per unit of risk. If you would invest  714.00  in United Hero ETF on September 22, 2024 and sell it today you would earn a total of  131.00  from holding United Hero ETF or generate 18.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.62%
Values	Daily Returns

United Hero ETF  vs.  BCAP MSCI Thailand

United Hero ETF

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in United Hero ETF are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting fundamental drivers, United Hero sustained solid returns over the last few months and may actually be approaching a breakup point.

BCAP MSCI Thailand

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BCAP MSCI Thailand has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Etf's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

Pair Trading with United Hero and BCAP MSCI

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

The idea behind United Hero ETF and BCAP MSCI Thailand 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .