Correlation Between Pace International and Ubs Pace
Can any of the company-specific risk be diversified away by investing in both Pace International and Ubs Pace 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 International and Ubs Pace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pace International Equity and Ubs Pace Global, you can compare the effects of market volatilities on Pace International and Ubs Pace 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 International with a short position of Ubs Pace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pace International and Ubs Pace.
Diversification Opportunities for Pace International and Ubs Pace
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pace and Ubs is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Pace International Equity and Ubs Pace Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Pace Global and Pace International 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 International Equity are associated (or correlated) with Ubs Pace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Pace Global has no effect on the direction of Pace International i.e., Pace International and Ubs Pace go up and down completely randomly.
Pair Corralation between Pace International and Ubs Pace
Assuming the 90 days horizon Pace International Equity is expected to under-perform the Ubs Pace. But the mutual fund apears to be less risky and, when comparing its historical volatility, Pace International Equity is 1.26 times less risky than Ubs Pace. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Ubs Pace Global is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 680.00 in Ubs Pace Global on August 31, 2024 and sell it today you would earn a total of 6.00 from holding Ubs Pace Global or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pace International Equity vs. Ubs Pace Global
Performance |
| Timeline |
| Pace International Equity |
| Ubs Pace Global |
Pace International and Ubs Pace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pace International and Ubs Pace
The main advantage of trading using opposite Pace International and Ubs Pace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pace International position performs unexpectedly, Ubs Pace 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 Pace will offset losses from the drop in Ubs Pace's long position.| Pace International vs. Alger Health Sciences | Pace International vs. Baron Health Care | Pace International vs. Health Biotchnology Portfolio | Pace International vs. Eventide Healthcare Life |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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