Correlation Between UBS AG and Dow Jones
Can any of the company-specific risk be diversified away by investing in both UBS AG 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 UBS AG and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG UBS and Dow Jones Industrial, you can compare the effects of market volatilities on UBS AG 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 UBS AG with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and Dow Jones.
Diversification Opportunities for UBS AG and Dow Jones
Modest diversification
The 3 months correlation between UBS and Dow is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG UBS 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 UBS AG 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 AG UBS 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 UBS AG i.e., UBS AG and Dow Jones go up and down completely randomly.
Pair Corralation between UBS AG and Dow Jones
Assuming the 90 days trading horizon UBS AG is expected to generate 1.69 times less return on investment than Dow Jones. In addition to that, UBS AG is 1.08 times more volatile than Dow Jones Industrial. It trades about 0.15 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.27 per unit of volatility. If you would invest 4,223,305 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 248,901 from holding Dow Jones Industrial or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS AG UBS vs. Dow Jones Industrial
Performance |
| Timeline |
UBS AG and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UBS AG UBS
Pair trading matchups for UBS AG
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UBS AG and Dow Jones
The main advantage of trading using opposite UBS AG and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG 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.| UBS AG vs. Scottish Mortgage Investment | UBS AG vs. VinaCapital Vietnam Opportunity | UBS AG vs. Edinburgh Worldwide Investment | UBS AG vs. Baillie Gifford Growth |
| Dow Jones vs. Skillful Craftsman Education | Dow Jones vs. Acco Brands | Dow Jones vs. Cracker Barrel Old | Dow Jones vs. Coursera |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |