Correlation Between UBS Fund and Xtrackers FTSE
Can any of the company-specific risk be diversified away by investing in both UBS Fund and Xtrackers FTSE 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 Xtrackers FTSE 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 Xtrackers FTSE, you can compare the effects of market volatilities on UBS Fund and Xtrackers FTSE 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 Xtrackers FTSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and Xtrackers FTSE.
Diversification Opportunities for UBS Fund and Xtrackers FTSE
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Xtrackers is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and Xtrackers FTSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers FTSE 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 Xtrackers FTSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers FTSE has no effect on the direction of UBS Fund i.e., UBS Fund and Xtrackers FTSE go up and down completely randomly.
Pair Corralation between UBS Fund and Xtrackers FTSE
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 1.16 times more return on investment than Xtrackers FTSE. However, UBS Fund is 1.16 times more volatile than Xtrackers FTSE. It trades about -0.01 of its potential returns per unit of risk. Xtrackers FTSE is currently generating about -0.13 per unit of risk. If you would invest 5,160 in UBS Fund Solutions on December 29, 2024 and sell it today you would lose (49.00) from holding UBS Fund Solutions or give up 0.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
UBS Fund Solutions vs. Xtrackers FTSE
Performance |
Timeline |
UBS Fund Solutions |
Xtrackers FTSE |
UBS Fund and Xtrackers FTSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UBS Fund and Xtrackers FTSE
The main advantage of trading using opposite UBS Fund and Xtrackers FTSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, Xtrackers FTSE 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 Xtrackers FTSE will offset losses from the drop in Xtrackers FTSE's long position.UBS Fund vs. UBS Barclays Liquid | UBS Fund vs. UBS ETF Public | UBS Fund vs. UBS ETF SICAV | UBS Fund vs. UBS Fund Solutions |
Xtrackers FTSE vs. Xtrackers II Global | Xtrackers FTSE vs. Xtrackers SP 500 | Xtrackers FTSE vs. Xtrackers MSCI | Xtrackers FTSE vs. Xtrackers Stoxx |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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