Correlation Between IShares Insurance and UBS AG
Can any of the company-specific risk be diversified away by investing in both IShares Insurance and UBS AG 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 IShares Insurance and UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Insurance ETF and UBS AG London, you can compare the effects of market volatilities on IShares Insurance and UBS AG 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 IShares Insurance with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Insurance and UBS AG.
Diversification Opportunities for IShares Insurance and UBS AG
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and UBS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding iShares Insurance ETF and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and IShares Insurance 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 iShares Insurance ETF are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of IShares Insurance i.e., IShares Insurance and UBS AG go up and down completely randomly.
Pair Corralation between IShares Insurance and UBS AG
Considering the 90-day investment horizon IShares Insurance is expected to generate 1.6 times less return on investment than UBS AG. In addition to that, IShares Insurance is 1.08 times more volatile than UBS AG London. It trades about 0.38 of its total potential returns per unit of risk. UBS AG London is currently generating about 0.66 per unit of volatility. If you would invest 2,362 in UBS AG London on September 1, 2024 and sell it today you would earn a total of 352.00 from holding UBS AG London or generate 14.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
iShares Insurance ETF vs. UBS AG London
Performance |
| Timeline |
| iShares Insurance ETF |
| UBS AG London |
IShares Insurance and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Insurance and UBS AG
The main advantage of trading using opposite IShares Insurance and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Insurance position performs unexpectedly, UBS AG 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 AG will offset losses from the drop in UBS AG's long position.| IShares Insurance vs. iShares Broker Dealers Securities | IShares Insurance vs. SPDR SP Insurance | IShares Insurance vs. iShares Regional Banks | IShares Insurance vs. iShares Pharmaceuticals ETF |
| UBS AG vs. First Trust Exchange Traded | UBS AG vs. Ultimus Managers Trust | UBS AG vs. Horizon Kinetics Medical | UBS AG vs. Harbor Health Care |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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