Correlation Between UBS Property and SPDR Dow
Can any of the company-specific risk be diversified away by investing in both UBS Property and SPDR Dow 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 Property and SPDR Dow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Property and SPDR Dow Jones, you can compare the effects of market volatilities on UBS Property and SPDR Dow 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 Property with a short position of SPDR Dow. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Property and SPDR Dow.
Diversification Opportunities for UBS Property and SPDR Dow
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBS and SPDR is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding UBS Property and SPDR Dow Jones in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Dow Jones and UBS Property 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 Property are associated (or correlated) with SPDR Dow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Dow Jones has no effect on the direction of UBS Property i.e., UBS Property and SPDR Dow go up and down completely randomly.
Pair Corralation between UBS Property and SPDR Dow
Assuming the 90 days trading horizon UBS Property is expected to generate 1.06 times more return on investment than SPDR Dow. However, UBS Property is 1.06 times more volatile than SPDR Dow Jones. It trades about 0.08 of its potential returns per unit of risk. SPDR Dow Jones is currently generating about 0.04 per unit of risk. If you would invest 6,460 in UBS Property on September 21, 2024 and sell it today you would earn a total of 720.00 from holding UBS Property or generate 11.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Property vs. SPDR Dow Jones
Performance |
| Timeline |
| UBS Property |
| SPDR Dow Jones |
UBS Property and SPDR Dow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Property and SPDR Dow
The main advantage of trading using opposite UBS Property and SPDR Dow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Property position performs unexpectedly, SPDR Dow 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 SPDR Dow will offset losses from the drop in SPDR Dow's long position.| UBS Property vs. SPDR Dow Jones | UBS Property vs. Baloise Holding AG | UBS Property vs. SPDR FTSE UK | UBS Property vs. Banque Cantonale du |
| SPDR Dow vs. Baloise Holding AG | SPDR Dow vs. 21Shares Polkadot ETP | SPDR Dow vs. UBS ETF MSCI | SPDR Dow vs. BB Biotech AG |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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