Correlation Between UBS ETF and SPDR MSCI
Can any of the company-specific risk be diversified away by investing in both UBS ETF and SPDR MSCI 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 MSCI 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 MSCI Europe, you can compare the effects of market volatilities on UBS ETF and SPDR MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and SPDR MSCI.
Diversification Opportunities for UBS ETF and SPDR MSCI
Almost no diversification
The 3 months correlation between UBS and SPDR is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and SPDR MSCI Europe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR MSCI Europe 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR MSCI Europe has no effect on the direction of UBS ETF i.e., UBS ETF and SPDR MSCI go up and down completely randomly.
Pair Corralation between UBS ETF and SPDR MSCI
Assuming the 90 days trading horizon UBS ETF is expected to generate 4.11 times less return on investment than SPDR MSCI. But when comparing it to its historical volatility, UBS ETF MSCI is 1.19 times less risky than SPDR MSCI. It trades about 0.05 of its potential returns per unit of risk. SPDR MSCI Europe is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 27,635 in SPDR MSCI Europe on September 13, 2024 and sell it today you would earn a total of 655.00 from holding SPDR MSCI Europe or generate 2.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF MSCI vs. SPDR MSCI Europe
Performance |
| Timeline |
| UBS ETF MSCI |
| SPDR MSCI Europe |
UBS ETF and SPDR MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and SPDR MSCI
The main advantage of trading using opposite UBS ETF and SPDR MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, SPDR MSCI 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 MSCI will offset losses from the drop in SPDR MSCI's long position.The idea behind UBS ETF MSCI and SPDR MSCI Europe 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.| SPDR MSCI vs. Baloise Holding AG | SPDR MSCI vs. 21Shares Polkadot ETP | SPDR MSCI vs. UBS ETF MSCI | SPDR MSCI vs. BB Biotech AG |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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