Correlation Between UBSFund Solutions and IShares Treasury
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and IShares Treasury 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 UBSFund Solutions and IShares Treasury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBSFund Solutions Bloomberg and iShares Treasury Bond, you can compare the effects of market volatilities on UBSFund Solutions and IShares Treasury 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 UBSFund Solutions with a short position of IShares Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and IShares Treasury.
Diversification Opportunities for UBSFund Solutions and IShares Treasury
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UBSFund and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions Bloomberg and iShares Treasury Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Treasury Bond and UBSFund Solutions 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 UBSFund Solutions Bloomberg are associated (or correlated) with IShares Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Treasury Bond has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and IShares Treasury go up and down completely randomly.
Pair Corralation between UBSFund Solutions and IShares Treasury
Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 2.78 times less return on investment than IShares Treasury. But when comparing it to its historical volatility, UBSFund Solutions Bloomberg is 6.35 times less risky than IShares Treasury. It trades about 0.21 of its potential returns per unit of risk. iShares Treasury Bond is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 344.00 in iShares Treasury Bond on September 1, 2024 and sell it today you would earn a total of 6.00 from holding iShares Treasury Bond or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBSFund Solutions Bloomberg vs. iShares Treasury Bond
Performance |
| Timeline |
| UBSFund Solutions |
| iShares Treasury Bond |
UBSFund Solutions and IShares Treasury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and IShares Treasury
The main advantage of trading using opposite UBSFund Solutions and IShares Treasury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, IShares Treasury 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 IShares Treasury will offset losses from the drop in IShares Treasury's long position.| UBSFund Solutions vs. UBSFund Solutions MSCI | UBSFund Solutions vs. UBSFund Solutions Bloomberg | UBSFund Solutions vs. UBSFund Solutions Bloomberg | UBSFund Solutions vs. UBSFund Solutions JP |
| IShares Treasury vs. iShares MSCI Japan | IShares Treasury vs. iShares JP Morgan | IShares Treasury vs. iShares MSCI Europe | IShares Treasury vs. iShares Nasdaq Biotechnology |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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