Correlation Between American Balanced and Ubs Allocation
Can any of the company-specific risk be diversified away by investing in both American Balanced and Ubs Allocation 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 American Balanced and Ubs Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced Fund and Ubs Allocation Fund, you can compare the effects of market volatilities on American Balanced and Ubs Allocation 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 American Balanced with a short position of Ubs Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Ubs Allocation.
Diversification Opportunities for American Balanced and Ubs Allocation
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Ubs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced Fund and Ubs Allocation Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Allocation and American Balanced 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 American Balanced Fund are associated (or correlated) with Ubs Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Allocation has no effect on the direction of American Balanced i.e., American Balanced and Ubs Allocation go up and down completely randomly.
Pair Corralation between American Balanced and Ubs Allocation
Assuming the 90 days horizon American Balanced is expected to generate 1.15 times less return on investment than Ubs Allocation. But when comparing it to its historical volatility, American Balanced Fund is 1.05 times less risky than Ubs Allocation. It trades about 0.13 of its potential returns per unit of risk. Ubs Allocation Fund is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4,995 in Ubs Allocation Fund on September 3, 2024 and sell it today you would earn a total of 634.00 from holding Ubs Allocation Fund or generate 12.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Balanced Fund vs. Ubs Allocation Fund
Performance |
| Timeline |
| American Balanced |
| Ubs Allocation |
American Balanced and Ubs Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Ubs Allocation
The main advantage of trading using opposite American Balanced and Ubs Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Ubs Allocation 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 Ubs Allocation will offset losses from the drop in Ubs Allocation's long position.| American Balanced vs. Mondrian Emerging Markets | American Balanced vs. Transamerica Emerging Markets | American Balanced vs. The Hartford Emerging | American Balanced vs. Kinetics Market Opportunities |
| Ubs Allocation vs. American Funds American | Ubs Allocation vs. American Funds American | Ubs Allocation vs. American Balanced | Ubs Allocation vs. American Balanced Fund |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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