Correlation Between SPDR Dow and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both SPDR Dow and UBSFund Solutions 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 SPDR Dow and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Dow Jones and UBSFund Solutions MSCI, you can compare the effects of market volatilities on SPDR Dow and UBSFund Solutions 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 SPDR Dow with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and UBSFund Solutions.
Diversification Opportunities for SPDR Dow and UBSFund Solutions
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SPDR and UBSFund is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and SPDR Dow 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 SPDR Dow Jones are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of SPDR Dow i.e., SPDR Dow and UBSFund Solutions go up and down completely randomly.
Pair Corralation between SPDR Dow and UBSFund Solutions
Assuming the 90 days trading horizon SPDR Dow is expected to generate 1.65 times less return on investment than UBSFund Solutions. In addition to that, SPDR Dow is 1.56 times more volatile than UBSFund Solutions MSCI. It trades about 0.19 of its total potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.48 per unit of volatility. If you would invest 2,757 in UBSFund Solutions MSCI on November 3, 2024 and sell it today you would earn a total of 143.00 from holding UBSFund Solutions MSCI or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Dow Jones vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| SPDR Dow Jones |
| UBSFund Solutions MSCI |
SPDR Dow and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and UBSFund Solutions
The main advantage of trading using opposite SPDR Dow and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.| SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR SP Utilities | SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR MSCI EM |
| UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg | UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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