Correlation Between UBS Fund and Dow Jones
Can any of the company-specific risk be diversified away by investing in both UBS Fund and Dow Jones 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 Fund and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Fund Solutions and Dow Jones Industrial, you can compare the effects of market volatilities on UBS Fund and Dow Jones 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 Fund with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and Dow Jones.
Diversification Opportunities for UBS Fund and Dow Jones
Poor diversification
The 3 months correlation between UBS and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and UBS Fund 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 Fund Solutions are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of UBS Fund i.e., UBS Fund and Dow Jones go up and down completely randomly.
Pair Corralation between UBS Fund and Dow Jones
Assuming the 90 days trading horizon UBS Fund is expected to generate 3.05 times less return on investment than Dow Jones. But when comparing it to its historical volatility, UBS Fund Solutions is 1.74 times less risky than Dow Jones. It trades about 0.19 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 4,205,219 in Dow Jones Industrial on September 2, 2024 and sell it today you would earn a total of 285,846 from holding Dow Jones Industrial or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
UBS Fund Solutions vs. Dow Jones Industrial
Performance |
| Timeline |
UBS Fund and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
UBS Fund Solutions
Pair trading matchups for UBS Fund
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with UBS Fund and Dow Jones
The main advantage of trading using opposite UBS Fund and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| UBS Fund vs. UBS ETF | UBS Fund vs. UBS ETF plc | UBS Fund vs. UBS ETF plc | UBS Fund vs. UBS Barclays Liquid |
| Dow Jones vs. Dream Finders Homes | Dow Jones vs. GEN Restaurant Group, | Dow Jones vs. National Beverage Corp | Dow Jones vs. BJs Restaurants |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |