Correlation Between Lyxor MSCI and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Lyxor MSCI and UBS ETF 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 Lyxor MSCI and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor MSCI Brazil and UBS ETF plc, you can compare the effects of market volatilities on Lyxor MSCI and UBS ETF 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 Lyxor MSCI with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor MSCI and UBS ETF.
Diversification Opportunities for Lyxor MSCI and UBS ETF
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Lyxor and UBS is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor MSCI Brazil and UBS ETF plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF plc and Lyxor MSCI 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 Lyxor MSCI Brazil are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF plc has no effect on the direction of Lyxor MSCI i.e., Lyxor MSCI and UBS ETF go up and down completely randomly.
Pair Corralation between Lyxor MSCI and UBS ETF
Assuming the 90 days trading horizon Lyxor MSCI Brazil is expected to under-perform the UBS ETF. In addition to that, Lyxor MSCI is 1.77 times more volatile than UBS ETF plc. It trades about -0.19 of its total potential returns per unit of risk. UBS ETF plc is currently generating about 0.14 per unit of volatility. If you would invest 2,343 in UBS ETF plc on September 2, 2024 and sell it today you would earn a total of 150.00 from holding UBS ETF plc or generate 6.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
Lyxor MSCI Brazil vs. UBS ETF plc
Performance |
| Timeline |
| Lyxor MSCI Brazil |
| UBS ETF plc |
Lyxor MSCI and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor MSCI and UBS ETF
The main advantage of trading using opposite Lyxor MSCI and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor MSCI position performs unexpectedly, UBS ETF 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 UBS ETF will offset losses from the drop in UBS ETF's long position.| Lyxor MSCI vs. Procimmo Real Estate | Lyxor MSCI vs. SPDR Dow Jones | Lyxor MSCI vs. Baloise Holding AG | Lyxor MSCI 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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