Correlation Between Lyxor UCITS and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both Lyxor UCITS and UBSFund Solutions 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 UCITS and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lyxor UCITS Stoxx and UBSFund Solutions MSCI, you can compare the effects of market volatilities on Lyxor UCITS and UBSFund Solutions 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 UCITS with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lyxor UCITS and UBSFund Solutions.
Diversification Opportunities for Lyxor UCITS and UBSFund Solutions
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Lyxor and UBSFund is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Lyxor UCITS Stoxx and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Lyxor UCITS 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 UCITS Stoxx are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Lyxor UCITS i.e., Lyxor UCITS and UBSFund Solutions go up and down completely randomly.
Pair Corralation between Lyxor UCITS and UBSFund Solutions
Assuming the 90 days trading horizon Lyxor UCITS Stoxx is expected to under-perform the UBSFund Solutions. In addition to that, Lyxor UCITS is 1.13 times more volatile than UBSFund Solutions MSCI. It trades about -0.03 of its total potential returns per unit of risk. UBSFund Solutions MSCI is currently generating about 0.02 per unit of volatility. If you would invest 2,639 in UBSFund Solutions MSCI on September 1, 2024 and sell it today you would earn a total of 33.00 from holding UBSFund Solutions MSCI or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lyxor UCITS Stoxx vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| Lyxor UCITS Stoxx |
| UBSFund Solutions MSCI |
Lyxor UCITS and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lyxor UCITS and UBSFund Solutions
The main advantage of trading using opposite Lyxor UCITS and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lyxor UCITS position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.The idea behind Lyxor UCITS Stoxx and UBSFund Solutions MSCI pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| UBSFund Solutions vs. iShares Core SP | UBSFund Solutions vs. iShares Core MSCI | UBSFund Solutions vs. Lyxor UCITS Stoxx |
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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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