Correlation Between UBSFund Solutions and Dow Jones
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and Dow Jones 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 UBSFund Solutions and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBSFund Solutions Bloomberg and Dow Jones Industrial, you can compare the effects of market volatilities on UBSFund Solutions and Dow Jones 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 UBSFund Solutions with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Dow Jones.
Diversification Opportunities for UBSFund Solutions and Dow Jones
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBSFund and Dow is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions Bloomberg and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and UBSFund Solutions 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 UBSFund Solutions Bloomberg are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Dow Jones go up and down completely randomly.
Pair Corralation between UBSFund Solutions and Dow Jones
Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 4.27 times less return on investment than Dow Jones. But when comparing it to its historical volatility, UBSFund Solutions Bloomberg is 1.69 times less risky than Dow Jones. It trades about 0.03 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,347,646 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,124,560 from holding Dow Jones Industrial or generate 33.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 84.24% |
| Values | Daily Returns |
UBSFund Solutions Bloomberg vs. Dow Jones Industrial
Performance |
| Timeline |
UBSFund Solutions and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UBSFund Solutions Bloomberg
Pair trading matchups for UBSFund Solutions
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UBSFund Solutions and Dow Jones
The main advantage of trading using opposite UBSFund Solutions and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. iShares Core SP | UBSFund Solutions vs. iShares Core MSCI | UBSFund Solutions vs. Baloise Holding AG |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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