Correlation Between UBSFund Solutions and Xtrackers MSCI
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and Xtrackers 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 Xtrackers 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 Xtrackers MSCI EMU, you can compare the effects of market volatilities on UBSFund Solutions and Xtrackers 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 Xtrackers MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Xtrackers MSCI.
Diversification Opportunities for UBSFund Solutions and Xtrackers MSCI
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UBSFund and Xtrackers is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Xtrackers MSCI EMU in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers MSCI EMU 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 Xtrackers MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers MSCI EMU has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Xtrackers MSCI go up and down completely randomly.
Pair Corralation between UBSFund Solutions and Xtrackers MSCI
Assuming the 90 days trading horizon UBSFund Solutions MSCI is expected to generate 1.37 times more return on investment than Xtrackers MSCI. However, UBSFund Solutions is 1.37 times more volatile than Xtrackers MSCI EMU. It trades about 0.18 of its potential returns per unit of risk. Xtrackers MSCI EMU is currently generating about -0.24 per unit of risk. If you would invest 4,614 in UBSFund Solutions MSCI on August 25, 2024 and sell it today you would earn a total of 150.00 from holding UBSFund Solutions MSCI or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. Xtrackers MSCI EMU
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| Xtrackers MSCI EMU |
UBSFund Solutions and Xtrackers MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and Xtrackers MSCI
The main advantage of trading using opposite UBSFund Solutions and Xtrackers MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, Xtrackers 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 Xtrackers MSCI will offset losses from the drop in Xtrackers MSCI's long position.| UBSFund Solutions vs. iShares VII PLC | UBSFund Solutions vs. iShares Core SP | UBSFund Solutions vs. Lyxor Japan UCITS | UBSFund Solutions vs. iShares Core MSCI |
| Xtrackers MSCI vs. UBSFund Solutions MSCI | Xtrackers MSCI vs. iShares VII PLC | Xtrackers MSCI vs. iShares Core SP | Xtrackers MSCI vs. Lyxor Japan UCITS |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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