Correlation Between The Emerging and Ubs Us
Can any of the company-specific risk be diversified away by investing in both The Emerging and Ubs Us 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 The Emerging and Ubs Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Ubs Small Cap, you can compare the effects of market volatilities on The Emerging and Ubs Us 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 The Emerging with a short position of Ubs Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Emerging and Ubs Us.
Diversification Opportunities for The Emerging and Ubs Us
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between The and Ubs is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and Ubs Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Small Cap and The Emerging 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 The Emerging Markets are associated (or correlated) with Ubs Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Small Cap has no effect on the direction of The Emerging i.e., The Emerging and Ubs Us go up and down completely randomly.
Pair Corralation between The Emerging and Ubs Us
Assuming the 90 days horizon The Emerging is expected to generate 2.87 times less return on investment than Ubs Us. But when comparing it to its historical volatility, The Emerging Markets is 1.55 times less risky than Ubs Us. It trades about 0.05 of its potential returns per unit of risk. Ubs Small Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,740 in Ubs Small Cap on September 4, 2024 and sell it today you would earn a total of 693.00 from holding Ubs Small Cap or generate 39.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.66% |
| Values | Daily Returns |
The Emerging Markets vs. Ubs Small Cap
Performance |
| Timeline |
| Emerging Markets |
| Ubs Small Cap |
The Emerging and Ubs Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Emerging and Ubs Us
The main advantage of trading using opposite The Emerging and Ubs Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Emerging position performs unexpectedly, Ubs Us 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 Us will offset losses from the drop in Ubs Us' long position.| The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard 500 Index | The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard Total Stock |
| Ubs Us vs. Calamos Dynamic Convertible | Ubs Us vs. Fidelity Sai Convertible | Ubs Us vs. Lord Abbett Convertible | Ubs Us vs. Advent Claymore Convertible |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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