Correlation Between Hewitt Money and Ubs Money

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Can any of the company-specific risk be diversified away by investing in both Hewitt Money and Ubs Money 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 Hewitt Money and Ubs Money into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hewitt Money Market and Ubs Money Series, you can compare the effects of market volatilities on Hewitt Money and Ubs Money 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 Hewitt Money with a short position of Ubs Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hewitt Money and Ubs Money.

Diversification Opportunities for Hewitt Money and Ubs Money

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Hewitt and Ubs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hewitt Money Market and Ubs Money Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Money Series and Hewitt Money 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 Hewitt Money Market are associated (or correlated) with Ubs Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Money Series has no effect on the direction of Hewitt Money i.e., Hewitt Money and Ubs Money go up and down completely randomly.

Pair Corralation between Hewitt Money and Ubs Money

Assuming the 90 days horizon Hewitt Money is expected to generate 2.0 times less return on investment than Ubs Money. In addition to that, Hewitt Money is 1.57 times more volatile than Ubs Money Series. It trades about 0.04 of its total potential returns per unit of risk. Ubs Money Series is currently generating about 0.13 per unit of volatility. If you would invest  98.00  in Ubs Money Series on August 24, 2024 and sell it today you would earn a total of  2.00  from holding Ubs Money Series or generate 2.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy97.66%
ValuesDaily Returns

Hewitt Money Market  vs.  Ubs Money Series

 Performance 
       Timeline  
Hewitt Money Market 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hewitt Money Market are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hewitt Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ubs Money Series 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ubs Money Series are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ubs Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hewitt Money and Ubs Money Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hewitt Money and Ubs Money

The main advantage of trading using opposite Hewitt Money and Ubs Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hewitt Money position performs unexpectedly, Ubs Money 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 Money will offset losses from the drop in Ubs Money's long position.
The idea behind Hewitt Money Market and Ubs Money Series pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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