Correlation Between Pace Intermediate and Ubs Emerging

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Can any of the company-specific risk be diversified away by investing in both Pace Intermediate and Ubs Emerging 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 Intermediate and Ubs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace Intermediate Fixed and Ubs Emerging Markets, you can compare the effects of market volatilities on Pace Intermediate and Ubs Emerging 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 Intermediate with a short position of Ubs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace Intermediate and Ubs Emerging.

Diversification Opportunities for Pace Intermediate and Ubs Emerging

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pace and Ubs is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pace Intermediate Fixed and Ubs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Emerging Markets and Pace Intermediate 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 Intermediate Fixed are associated (or correlated) with Ubs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Emerging Markets has no effect on the direction of Pace Intermediate i.e., Pace Intermediate and Ubs Emerging go up and down completely randomly.

Pair Corralation between Pace Intermediate and Ubs Emerging

Assuming the 90 days horizon Pace Intermediate is expected to generate 1.15 times less return on investment than Ubs Emerging. But when comparing it to its historical volatility, Pace Intermediate Fixed is 2.56 times less risky than Ubs Emerging. It trades about 0.06 of its potential returns per unit of risk. Ubs Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  707.00  in Ubs Emerging Markets on August 26, 2024 and sell it today you would earn a total of  73.00  from holding Ubs Emerging Markets or generate 10.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Pace Intermediate Fixed  vs.  Ubs Emerging Markets

 Performance 
       Timeline  
Pace Intermediate Fixed 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pace Intermediate Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pace Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Ubs Emerging Markets 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ubs Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ubs Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pace Intermediate and Ubs Emerging Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Pace Intermediate and Ubs Emerging

The main advantage of trading using opposite Pace Intermediate and Ubs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace Intermediate position performs unexpectedly, Ubs Emerging 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 Emerging will offset losses from the drop in Ubs Emerging's long position.
The idea behind Pace Intermediate Fixed and Ubs Emerging Markets 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.
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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