Correlation Between IShares SP and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both IShares SP and UBSFund Solutions 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 SP and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP 500 and UBSFund Solutions MSCI, you can compare the effects of market volatilities on IShares SP and UBSFund Solutions 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 SP with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and UBSFund Solutions.
Diversification Opportunities for IShares SP and UBSFund Solutions
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and UBSFund is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 500 and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and IShares SP 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 SP 500 are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of IShares SP i.e., IShares SP and UBSFund Solutions go up and down completely randomly.
Pair Corralation between IShares SP and UBSFund Solutions
Assuming the 90 days trading horizon IShares SP is expected to generate 1.29 times less return on investment than UBSFund Solutions. But when comparing it to its historical volatility, iShares SP 500 is 2.0 times less risky than UBSFund Solutions. It trades about 0.11 of its potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,288 in UBSFund Solutions MSCI on August 30, 2024 and sell it today you would earn a total of 533.00 from holding UBSFund Solutions MSCI or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 66.73% |
| Values | Daily Returns |
iShares SP 500 vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| iShares SP 500 |
| UBSFund Solutions MSCI |
IShares SP and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and UBSFund Solutions
The main advantage of trading using opposite IShares SP and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.| IShares SP vs. iShares III Public | IShares SP vs. iShares Core MSCI | IShares SP vs. iShares France Govt | IShares SP vs. iShares Edge MSCI |
| UBSFund Solutions vs. iShares II Public | UBSFund Solutions vs. iShares Core MSCI | UBSFund Solutions vs. iShares SP 500 |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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