Correlation Between IShares European and UBS ETF
Can any of the company-specific risk be diversified away by investing in both IShares European and UBS ETF 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 European and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares European Property and UBS ETF MSCI, you can compare the effects of market volatilities on IShares European and UBS ETF 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 European with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares European and UBS ETF.
Diversification Opportunities for IShares European and UBS ETF
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between IShares and UBS is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding iShares European Property and UBS ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF MSCI and IShares European 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 European Property are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF MSCI has no effect on the direction of IShares European i.e., IShares European and UBS ETF go up and down completely randomly.
Pair Corralation between IShares European and UBS ETF
Assuming the 90 days trading horizon IShares European is expected to generate 1.24 times less return on investment than UBS ETF. In addition to that, IShares European is 1.66 times more volatile than UBS ETF MSCI. It trades about 0.04 of its total potential returns per unit of risk. UBS ETF MSCI is currently generating about 0.08 per unit of volatility. If you would invest 1,733 in UBS ETF MSCI on September 14, 2024 and sell it today you would earn a total of 255.00 from holding UBS ETF MSCI or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.63% |
| Values | Daily Returns |
iShares European Property vs. UBS ETF MSCI
Performance |
| Timeline |
| iShares European Property |
| UBS ETF MSCI |
IShares European and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares European and UBS ETF
The main advantage of trading using opposite IShares European and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares European position performs unexpectedly, UBS ETF 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 ETF will offset losses from the drop in UBS ETF's long position.| IShares European vs. Baloise Holding AG | IShares European vs. 21Shares Polkadot ETP | IShares European vs. UBS ETF MSCI | IShares European vs. BB Biotech AG |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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