Correlation Between IShares Global and UBS

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Can any of the company-specific risk be diversified away by investing in both IShares Global and UBS 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 Global and UBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global 100 and UBS, you can compare the effects of market volatilities on IShares Global and UBS 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 Global with a short position of UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and UBS.

Diversification Opportunities for IShares Global and UBS

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between IShares and UBS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global 100 and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and IShares Global 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 Global 100 are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of IShares Global i.e., IShares Global and UBS go up and down completely randomly.

Pair Corralation between IShares Global and UBS

If you would invest  7,969  in iShares Global 100 on September 14, 2024 and sell it today you would earn a total of  2,300  from holding iShares Global 100 or generate 28.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy0.4%
ValuesDaily Returns

iShares Global 100  vs.  UBS

 Performance 
       Timeline  
iShares Global 100 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Global 100 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Global is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
UBS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, UBS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

IShares Global and UBS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Global and UBS

The main advantage of trading using opposite IShares Global and UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global position performs unexpectedly, UBS 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 will offset losses from the drop in UBS's long position.
The idea behind iShares Global 100 and UBS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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