Correlation Between UBS ETF and ZKB Gold
Can any of the company-specific risk be diversified away by investing in both UBS ETF and ZKB Gold 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 ZKB Gold 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 ZKB Gold ETF, you can compare the effects of market volatilities on UBS ETF and ZKB Gold 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 ZKB Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and ZKB Gold.
Diversification Opportunities for UBS ETF and ZKB Gold
Average diversification
The 3 months correlation between UBS and ZKB is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and ZKB Gold ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZKB Gold ETF 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 ZKB Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZKB Gold ETF has no effect on the direction of UBS ETF i.e., UBS ETF and ZKB Gold go up and down completely randomly.
Pair Corralation between UBS ETF and ZKB Gold
Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the ZKB Gold. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF MSCI is 1.38 times less risky than ZKB Gold. The etf trades about -0.14 of its potential returns per unit of risk. The ZKB Gold ETF is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 136,780 in ZKB Gold ETF on September 13, 2024 and sell it today you would earn a total of 1,080 from holding ZKB Gold ETF or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF MSCI vs. ZKB Gold ETF
Performance |
| Timeline |
| UBS ETF MSCI |
| ZKB Gold ETF |
UBS ETF and ZKB Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and ZKB Gold
The main advantage of trading using opposite UBS ETF and ZKB Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, ZKB Gold 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 ZKB Gold will offset losses from the drop in ZKB Gold's long position.The idea behind UBS ETF MSCI and ZKB Gold ETF 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.| ZKB Gold vs. Baloise Holding AG | ZKB Gold vs. 21Shares Polkadot ETP | ZKB Gold vs. UBS ETF MSCI | ZKB Gold 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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