Correlation Between Global X and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Global X and UBS ETF 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 Global X and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X FinTech and UBS ETF plc, you can compare the effects of market volatilities on Global X and UBS ETF 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 Global X with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and UBS ETF.
Diversification Opportunities for Global X and UBS ETF
Very poor diversification
The 3 months correlation between Global and UBS is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Global X FinTech and UBS ETF plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF plc and Global X 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 Global X FinTech are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF plc has no effect on the direction of Global X i.e., Global X and UBS ETF go up and down completely randomly.
Pair Corralation between Global X and UBS ETF
Assuming the 90 days trading horizon Global X FinTech is expected to generate 2.13 times more return on investment than UBS ETF. However, Global X is 2.13 times more volatile than UBS ETF plc. It trades about 0.07 of its potential returns per unit of risk. UBS ETF plc is currently generating about 0.07 per unit of risk. If you would invest 640.00 in Global X FinTech on September 3, 2024 and sell it today you would earn a total of 421.00 from holding Global X FinTech or generate 65.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X FinTech vs. UBS ETF plc
Performance |
| Timeline |
| Global X FinTech |
| UBS ETF plc |
Global X and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and UBS ETF
The main advantage of trading using opposite Global X and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, UBS ETF 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 UBS ETF will offset losses from the drop in UBS ETF's long position.| Global X vs. Global X Data | Global X vs. Global X Copper | Global X vs. Global X ETFs | Global X vs. Global X Infrastructure |
| UBS ETF vs. GraniteShares 3x Short | UBS ETF vs. WisdomTree Natural Gas | UBS ETF vs. Leverage Shares 3x | UBS ETF vs. WisdomTree Natural Gas |
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.
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