Correlation Between UBS Fund and IShares Public

Can any of the company-specific risk be diversified away by investing in both UBS Fund and IShares Public 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 IShares Public 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 iShares Public Limited, you can compare the effects of market volatilities on UBS Fund and IShares Public 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 IShares Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and IShares Public.

Diversification Opportunities for UBS Fund and IShares Public

0.47

Correlation Coefficient

UBS Fund  IShares Public

Very weak diversification

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

Pair Corralation between UBS Fund and IShares Public

Assuming the 90 days trading horizon UBS Fund is expected to generate 49.16 times less return on investment than IShares Public. But when comparing it to its historical volatility, UBS Fund Solutions is 1.43 times less risky than IShares Public. It trades about 0.01 of its potential returns per unit of risk. iShares Public Limited is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest  5,918  in iShares Public Limited on October 26, 2024 and sell it today you would earn a total of  395.00  from holding iShares Public Limited or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

UBS Fund Solutions  vs.  iShares Public Limited

UBS Fund Solutions

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Fund Solutions are ranked lower than 8 (%) 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.

iShares Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Public Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, IShares Public may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with UBS Fund and IShares Public

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

The idea behind UBS Fund Solutions and iShares Public Limited 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.