Correlation Between Pace Mortgage-backed and Ubs Multi
Can any of the company-specific risk be diversified away by investing in both Pace Mortgage-backed and Ubs Multi 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 Pace Mortgage-backed and Ubs Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Mortgage Backed Securities and Ubs Multi Income, you can compare the effects of market volatilities on Pace Mortgage-backed and Ubs Multi 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 Pace Mortgage-backed with a short position of Ubs Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Mortgage-backed and Ubs Multi.
Diversification Opportunities for Pace Mortgage-backed and Ubs Multi
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Pace and Ubs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Pace Mortgage Backed Securitie and Ubs Multi Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Multi Income and Pace Mortgage-backed 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 Pace Mortgage Backed Securities are associated (or correlated) with Ubs Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Multi Income has no effect on the direction of Pace Mortgage-backed i.e., Pace Mortgage-backed and Ubs Multi go up and down completely randomly.
Pair Corralation between Pace Mortgage-backed and Ubs Multi
Assuming the 90 days horizon Pace Mortgage-backed is expected to generate 2.62 times less return on investment than Ubs Multi. In addition to that, Pace Mortgage-backed is 1.42 times more volatile than Ubs Multi Income. It trades about 0.03 of its total potential returns per unit of risk. Ubs Multi Income is currently generating about 0.11 per unit of volatility. If you would invest 1,224 in Ubs Multi Income on September 4, 2024 and sell it today you would earn a total of 133.00 from holding Ubs Multi Income or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 77.21% |
| Values | Daily Returns |
Pace Mortgage Backed Securitie vs. Ubs Multi Income
Performance |
| Timeline |
| Pace Mortgage Backed |
| Ubs Multi Income |
Pace Mortgage-backed and Ubs Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace Mortgage-backed and Ubs Multi
The main advantage of trading using opposite Pace Mortgage-backed and Ubs Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Mortgage-backed position performs unexpectedly, Ubs Multi 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 Multi will offset losses from the drop in Ubs Multi's long position.| Pace Mortgage-backed vs. Pace Smallmedium Value | Pace Mortgage-backed vs. Pace International Equity | Pace Mortgage-backed vs. Pace International Equity | Pace Mortgage-backed vs. Ubs Allocation Fund |
| Ubs Multi vs. Artisan High Income | Ubs Multi vs. California Bond Fund | Ubs Multi vs. Limited Term Tax | Ubs Multi vs. Maryland Tax Free Bond |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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