Correlation Between UBS ETF and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both UBS ETF and SPDR Dow 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 ETF and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF MSCI and SPDR Dow Jones, you can compare the effects of market volatilities on UBS ETF and SPDR Dow 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 ETF with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and SPDR Dow.
Diversification Opportunities for UBS ETF and SPDR Dow
Good diversification
The 3 months correlation between UBS and SPDR is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and UBS ETF 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 ETF MSCI are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of UBS ETF i.e., UBS ETF and SPDR Dow go up and down completely randomly.
Pair Corralation between UBS ETF and SPDR Dow
Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the SPDR Dow. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF MSCI is 1.66 times less risky than SPDR Dow. The etf trades about -0.19 of its potential returns per unit of risk. The SPDR Dow Jones is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,777 in SPDR Dow Jones on August 28, 2024 and sell it today you would earn a total of 46.00 from holding SPDR Dow Jones or generate 2.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF MSCI vs. SPDR Dow Jones
Performance |
| Timeline |
| UBS ETF MSCI |
| SPDR Dow Jones |
UBS ETF and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and SPDR Dow
The main advantage of trading using opposite UBS ETF and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| UBS ETF vs. UBSFund Solutions MSCI | UBS ETF vs. iShares VII PLC | UBS ETF vs. iShares SP 500 | UBS ETF vs. Lyxor UCITS Stoxx |
| SPDR Dow vs. UBSFund Solutions MSCI | SPDR Dow vs. iShares VII PLC | SPDR Dow vs. iShares SP 500 | SPDR Dow vs. Lyxor UCITS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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