Correlation Between UBSFund Solutions and IShares Edge
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and IShares Edge 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 IShares Edge 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 iShares Edge MSCI, you can compare the effects of market volatilities on UBSFund Solutions and IShares Edge 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 IShares Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and IShares Edge.
Diversification Opportunities for UBSFund Solutions and IShares Edge
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBSFund and IShares is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and iShares Edge MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Edge MSCI 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 IShares Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Edge MSCI has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and IShares Edge go up and down completely randomly.
Pair Corralation between UBSFund Solutions and IShares Edge
Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to under-perform the IShares Edge. In addition to that, UBSFund Solutions is 2.25 times more volatile than iShares Edge MSCI. It trades about -0.01 of its total potential returns per unit of risk. iShares Edge MSCI is currently generating about 0.14 per unit of volatility. If you would invest 673.00 in iShares Edge MSCI on August 30, 2024 and sell it today you would earn a total of 93.00 from holding iShares Edge MSCI or generate 13.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.06% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. iShares Edge MSCI
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| iShares Edge MSCI |
UBSFund Solutions and IShares Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and IShares Edge
The main advantage of trading using opposite UBSFund Solutions and IShares Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, IShares Edge 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 IShares Edge will offset losses from the drop in IShares Edge's long position.| UBSFund Solutions vs. iShares Core SP | UBSFund Solutions vs. Baloise Holding AG | UBSFund Solutions vs. Autoneum Holding AG | UBSFund Solutions vs. UBS ETF MSCI |
| IShares Edge vs. UBSFund Solutions MSCI | IShares Edge vs. iShares Core SP | IShares Edge vs. Baloise Holding AG | IShares Edge vs. Autoneum Holding 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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