Correlation Between UBSFund Solutions and Lyxor MSCI
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and Lyxor MSCI 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 UBSFund Solutions and Lyxor MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBSFund Solutions MSCI and Lyxor MSCI China, you can compare the effects of market volatilities on UBSFund Solutions and Lyxor MSCI 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 UBSFund Solutions with a short position of Lyxor MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Lyxor MSCI.
Diversification Opportunities for UBSFund Solutions and Lyxor MSCI
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBSFund and Lyxor is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Lyxor MSCI China in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor MSCI China and UBSFund Solutions 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 UBSFund Solutions MSCI are associated (or correlated) with Lyxor MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor MSCI China has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Lyxor MSCI go up and down completely randomly.
Pair Corralation between UBSFund Solutions and Lyxor MSCI
Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to generate 0.54 times more return on investment than Lyxor MSCI. However, UBSFund Solutions MSCI is 1.86 times less risky than Lyxor MSCI. It trades about 0.0 of its potential returns per unit of risk. Lyxor MSCI China is currently generating about -0.07 per unit of risk. If you would invest 4,878 in UBSFund Solutions MSCI on October 14, 2024 and sell it today you would lose (22.00) from holding UBSFund Solutions MSCI or give up 0.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.67% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. Lyxor MSCI China
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| Lyxor MSCI China |
UBSFund Solutions and Lyxor MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and Lyxor MSCI
The main advantage of trading using opposite UBSFund Solutions and Lyxor MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, Lyxor MSCI 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 Lyxor MSCI will offset losses from the drop in Lyxor MSCI's long position.| UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg | UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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