Correlation Between IShares Ultra and UBS AG
Can any of the company-specific risk be diversified away by investing in both IShares Ultra 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 Ultra 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 Ultra Short Term and UBS AG London, you can compare the effects of market volatilities on IShares Ultra 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 Ultra with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Ultra and UBS AG.
Diversification Opportunities for IShares Ultra and UBS AG
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and UBS is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding iShares Ultra Short Term 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 Ultra 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 Ultra Short Term 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 Ultra i.e., IShares Ultra and UBS AG go up and down completely randomly.
Pair Corralation between IShares Ultra and UBS AG
Given the investment horizon of 90 days IShares Ultra is expected to generate 21.97 times less return on investment than UBS AG. But when comparing it to its historical volatility, iShares Ultra Short Term is 39.62 times less risky than UBS AG. It trades about 0.92 of its potential returns per unit of risk. UBS AG London is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 1,842 in UBS AG London on October 23, 2024 and sell it today you would earn a total of 174.30 from holding UBS AG London or generate 9.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Ultra Short Term vs. UBS AG London
Performance |
| Timeline |
| iShares Ultra Short |
| UBS AG London |
IShares Ultra and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Ultra and UBS AG
The main advantage of trading using opposite IShares Ultra and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Ultra 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 Ultra vs. SPDR Bloomberg 1 3 | IShares Ultra vs. iShares Short Treasury | IShares Ultra vs. JPMorgan Ultra Short Income | IShares Ultra vs. WisdomTree Floating Rate |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |