Correlation Between UBS AG and Fidelity MSCI
Can any of the company-specific risk be diversified away by investing in both UBS AG and Fidelity 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 UBS AG and Fidelity MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG London and Fidelity MSCI Financials, you can compare the effects of market volatilities on UBS AG and Fidelity 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 UBS AG with a short position of Fidelity MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and Fidelity MSCI.
Diversification Opportunities for UBS AG and Fidelity MSCI
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Fidelity is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London and Fidelity MSCI Financials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity MSCI Financials and UBS AG 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 UBS AG London are associated (or correlated) with Fidelity MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity MSCI Financials has no effect on the direction of UBS AG i.e., UBS AG and Fidelity MSCI go up and down completely randomly.
Pair Corralation between UBS AG and Fidelity MSCI
Given the investment horizon of 90 days UBS AG is expected to generate 1.68 times less return on investment than Fidelity MSCI. But when comparing it to its historical volatility, UBS AG London is 1.42 times less risky than Fidelity MSCI. It trades about 0.17 of its potential returns per unit of risk. Fidelity MSCI Financials is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 6,261 in Fidelity MSCI Financials on August 26, 2024 and sell it today you would earn a total of 986.00 from holding Fidelity MSCI Financials or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS AG London vs. Fidelity MSCI Financials
Performance |
| Timeline |
| UBS AG London |
| Fidelity MSCI Financials |
UBS AG and Fidelity MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS AG and Fidelity MSCI
The main advantage of trading using opposite UBS AG and Fidelity MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG position performs unexpectedly, Fidelity 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 Fidelity MSCI will offset losses from the drop in Fidelity MSCI's long position.| 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 |
| Fidelity MSCI vs. UBS AG London | Fidelity MSCI vs. UBS AG London | Fidelity MSCI vs. ETRACS Quarterly Pay | Fidelity MSCI vs. ETRACS 2xMonthly Pay |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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