Correlation Between SPDR Dow and UBS ETF
Can any of the company-specific risk be diversified away by investing in both SPDR Dow 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 SPDR Dow and UBS ETF 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 UBS ETF MSCI, you can compare the effects of market volatilities on SPDR Dow 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 SPDR Dow with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Dow and UBS ETF.
Diversification Opportunities for SPDR Dow and UBS ETF
Good diversification
The 3 months correlation between SPDR and UBS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Dow Jones and UBS ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF 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 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 MSCI has no effect on the direction of SPDR Dow i.e., SPDR Dow and UBS ETF go up and down completely randomly.
Pair Corralation between SPDR Dow and UBS ETF
Assuming the 90 days trading horizon SPDR Dow Jones is expected to generate 1.55 times more return on investment than UBS ETF. However, SPDR Dow is 1.55 times more volatile than UBS ETF MSCI. It trades about 0.08 of its potential returns per unit of risk. UBS ETF MSCI is currently generating about -0.11 per unit of risk. If you would invest 1,767 in SPDR Dow Jones on August 24, 2024 and sell it today you would earn a total of 39.00 from holding SPDR Dow Jones or generate 2.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Dow Jones vs. UBS ETF MSCI
Performance |
| Timeline |
| SPDR Dow Jones |
| UBS ETF MSCI |
SPDR Dow and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Dow and UBS ETF
The main advantage of trading using opposite SPDR Dow and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Dow 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.| SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR SP Utilities | SPDR Dow vs. SPDR MSCI Europe | SPDR Dow vs. SPDR MSCI EM |
| UBS ETF vs. UBSFund Solutions MSCI | UBS ETF vs. iShares VII PLC | UBS ETF vs. iShares Core SP | UBS ETF vs. Lyxor Japan UCITS |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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