Correlation Between Legal General and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both Legal General and UBSFund Solutions 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 Legal General and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Legal General UCITS and UBSFund Solutions MSCI, you can compare the effects of market volatilities on Legal General and UBSFund Solutions 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 Legal General with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Legal General and UBSFund Solutions.
Diversification Opportunities for Legal General and UBSFund Solutions
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Legal and UBSFund is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Legal General UCITS and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Legal General 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 Legal General UCITS are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Legal General i.e., Legal General and UBSFund Solutions go up and down completely randomly.
Pair Corralation between Legal General and UBSFund Solutions
Assuming the 90 days trading horizon Legal General is expected to generate 96.57 times less return on investment than UBSFund Solutions. In addition to that, Legal General is 1.09 times more volatile than UBSFund Solutions MSCI. It trades about 0.0 of its total potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.35 per unit of volatility. If you would invest 1,676 in UBSFund Solutions MSCI on August 30, 2024 and sell it today you would earn a total of 153.00 from holding UBSFund Solutions MSCI or generate 9.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Legal General UCITS vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| Legal General UCITS |
| UBSFund Solutions MSCI |
Legal General and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Legal General and UBSFund Solutions
The main advantage of trading using opposite Legal General and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Legal General position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.| Legal General vs. iShares II Public | Legal General vs. iShares Core MSCI | Legal General vs. iShares SP 500 |
| UBSFund Solutions vs. iShares II Public | UBSFund Solutions vs. iShares Core MSCI | UBSFund Solutions vs. iShares SP 500 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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