Correlation Between UBS Fund and SP 500
Can any of the company-specific risk be diversified away by investing in both UBS Fund and SP 500 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 Fund and SP 500 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Fund Solutions and SP 500 VIX, you can compare the effects of market volatilities on UBS Fund and SP 500 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 Fund with a short position of SP 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and SP 500.
Diversification Opportunities for UBS Fund and SP 500
Significant diversification
The 3 months correlation between UBS and VILX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and SP 500 VIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP 500 VIX and UBS Fund 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 Fund Solutions are associated (or correlated) with SP 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP 500 VIX has no effect on the direction of UBS Fund i.e., UBS Fund and SP 500 go up and down completely randomly.
Pair Corralation between UBS Fund and SP 500
Assuming the 90 days trading horizon UBS Fund is expected to generate 60.81 times less return on investment than SP 500. But when comparing it to its historical volatility, UBS Fund Solutions is 30.65 times less risky than SP 500. It trades about 0.02 of its potential returns per unit of risk. SP 500 VIX is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 518.00 in SP 500 VIX on September 12, 2024 and sell it today you would earn a total of 158,735 from holding SP 500 VIX or generate 30643.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.44% |
| Values | Daily Returns |
UBS Fund Solutions vs. SP 500 VIX
Performance |
| Timeline |
| UBS Fund Solutions |
| SP 500 VIX |
UBS Fund and SP 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and SP 500
The main advantage of trading using opposite UBS Fund and SP 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, SP 500 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 SP 500 will offset losses from the drop in SP 500's long position.| UBS Fund vs. Vanguard FTSE Developed | UBS Fund vs. Leverage Shares 2x | UBS Fund vs. Amundi Index Solutions | UBS Fund vs. Amundi Index Solutions |
| SP 500 vs. WisdomTree Natural Gas | SP 500 vs. WisdomTree Natural Gas | SP 500 vs. Leverage Shares 2x | SP 500 vs. WisdomTree Silver 3x |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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