Correlation Between UBSFund Solutions and Xtrackers Russell
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and Xtrackers Russell 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 Russell 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 Russell 2000, you can compare the effects of market volatilities on UBSFund Solutions and Xtrackers Russell 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 Russell. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and Xtrackers Russell.
Diversification Opportunities for UBSFund Solutions and Xtrackers Russell
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UBSFund and Xtrackers is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and Xtrackers Russell 2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Russell 2000 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 Russell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Russell 2000 has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and Xtrackers Russell go up and down completely randomly.
Pair Corralation between UBSFund Solutions and Xtrackers Russell
Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 3.87 times less return on investment than Xtrackers Russell. But when comparing it to its historical volatility, UBSFund Solutions MSCI is 3.02 times less risky than Xtrackers Russell. It trades about 0.17 of its potential returns per unit of risk. Xtrackers Russell 2000 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 27,165 in Xtrackers Russell 2000 on September 13, 2024 and sell it today you would earn a total of 3,785 from holding Xtrackers Russell 2000 or generate 13.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.96% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. Xtrackers Russell 2000
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| Xtrackers Russell 2000 |
UBSFund Solutions and Xtrackers Russell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and Xtrackers Russell
The main advantage of trading using opposite UBSFund Solutions and Xtrackers Russell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, Xtrackers Russell 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 Russell will offset losses from the drop in Xtrackers Russell'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 |
| Xtrackers Russell vs. Xtrackers MSCI USA | Xtrackers Russell vs. Xtrackers USD Corporate | Xtrackers Russell vs. Xtrackers MSCI AC | Xtrackers Russell vs. Xtrackers MSCI World |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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