Correlation Between UBSFund Solutions and Lyxor Japan
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and Lyxor Japan 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 Japan 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 Japan UCITS, you can compare the effects of market volatilities on UBSFund Solutions and Lyxor Japan 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 Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Lyxor Japan.
Diversification Opportunities for UBSFund Solutions and Lyxor Japan
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBSFund and Lyxor is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Lyxor Japan UCITS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor Japan UCITS 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 Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor Japan UCITS has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Lyxor Japan go up and down completely randomly.
Pair Corralation between UBSFund Solutions and Lyxor Japan
Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 2.05 times less return on investment than Lyxor Japan. But when comparing it to its historical volatility, UBSFund Solutions MSCI is 1.06 times less risky than Lyxor Japan. It trades about 0.03 of its potential returns per unit of risk. Lyxor Japan UCITS is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,170,435 in Lyxor Japan UCITS on August 26, 2024 and sell it today you would earn a total of 444,065 from holding Lyxor Japan UCITS or generate 20.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 87.27% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. Lyxor Japan UCITS
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| Lyxor Japan UCITS |
UBSFund Solutions and Lyxor Japan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and Lyxor Japan
The main advantage of trading using opposite UBSFund Solutions and Lyxor Japan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, Lyxor Japan 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 Japan will offset losses from the drop in Lyxor Japan'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 |
| Lyxor Japan vs. UBSFund Solutions MSCI | Lyxor Japan vs. iShares VII PLC | Lyxor Japan vs. iShares Core MSCI | Lyxor Japan 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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