Correlation Between Global X and UBS AG
Can any of the company-specific risk be diversified away by investing in both Global X and UBS AG 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 Global X and UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X MLP and UBS AG London, you can compare the effects of market volatilities on Global X and UBS AG 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 Global X with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and UBS AG.
Diversification Opportunities for Global X and UBS AG
No risk reduction
The 3 months correlation between Global and UBS is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Global X MLP and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and Global X 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 Global X MLP are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of Global X i.e., Global X and UBS AG go up and down completely randomly.
Pair Corralation between Global X and UBS AG
Given the investment horizon of 90 days Global X is expected to generate 1.11 times less return on investment than UBS AG. But when comparing it to its historical volatility, Global X MLP is 1.09 times less risky than UBS AG. It trades about 0.53 of its potential returns per unit of risk. UBS AG London is currently generating about 0.54 of returns per unit of risk over similar time horizon. If you would invest 2,368 in UBS AG London on August 31, 2024 and sell it today you would earn a total of 284.60 from holding UBS AG London or generate 12.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Global X MLP vs. UBS AG London
Performance |
| Timeline |
| Global X MLP |
| UBS AG London |
Global X and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and UBS AG
The main advantage of trading using opposite Global X and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, UBS AG 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 AG will offset losses from the drop in UBS AG's long position.| Global X vs. Global X MLP | Global X vs. InfraCap MLP ETF | Global X vs. Alerian MLP ETF | Global X vs. First Trust North |
| UBS AG vs. First Trust Exchange Traded | UBS AG vs. Ultimus Managers Trust | UBS AG vs. Horizon Kinetics Medical | UBS AG vs. Harbor Health Care |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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