Correlation Between UBS Fund and WisdomTree Wheat

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

By analyzing existing cross correlation between UBS Fund Solutions and WisdomTree Wheat 2x, you can compare the effects of market volatilities on UBS Fund and WisdomTree Wheat 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 Fund with a short position of WisdomTree Wheat. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and WisdomTree Wheat.

Diversification Opportunities for UBS Fund and WisdomTree Wheat

-0.47

Correlation Coefficient

UBS Fund  WisdomTree Wheat

Very good diversification

The 3 months correlation between UBS and WisdomTree is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and WisdomTree Wheat 2x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Wheat and UBS Fund 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 Fund Solutions are associated (or correlated) with WisdomTree Wheat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Wheat has no effect on the direction of UBS Fund i.e., UBS Fund and WisdomTree Wheat go up and down completely randomly.

Pair Corralation between UBS Fund and WisdomTree Wheat

If you would invest  4,209  in UBS Fund Solutions on October 11, 2024 and sell it today you would earn a total of  1,051  from holding UBS Fund Solutions or generate 24.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

UBS Fund Solutions  vs.  WisdomTree Wheat 2x

UBS Fund Solutions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Fund Solutions are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, UBS Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

WisdomTree Wheat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WisdomTree Wheat 2x has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Etf's forward-looking indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the fund shareholders.

Pair Trading with UBS Fund and WisdomTree Wheat

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

The idea behind UBS Fund Solutions and WisdomTree Wheat 2x 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.