Correlation Between UBS Fund and LG Battery
Can any of the company-specific risk be diversified away by investing in both UBS Fund and LG Battery 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 LG Battery 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 LG Battery Value Chain, you can compare the effects of market volatilities on UBS Fund and LG Battery 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 LG Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and LG Battery.
Diversification Opportunities for UBS Fund and LG Battery
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UBS and BATE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and LG Battery Value Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Battery Value 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 LG Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Battery Value has no effect on the direction of UBS Fund i.e., UBS Fund and LG Battery go up and down completely randomly.
Pair Corralation between UBS Fund and LG Battery
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 0.77 times more return on investment than LG Battery. However, UBS Fund Solutions is 1.29 times less risky than LG Battery. It trades about 0.05 of its potential returns per unit of risk. LG Battery Value Chain is currently generating about 0.03 per unit of risk. If you would invest 4,627 in UBS Fund Solutions on November 5, 2024 and sell it today you would earn a total of 714.00 from holding UBS Fund Solutions or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Fund Solutions vs. LG Battery Value Chain
Performance |
| Timeline |
| UBS Fund Solutions |
| LG Battery Value |
UBS Fund and LG Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and LG Battery
The main advantage of trading using opposite UBS Fund and LG Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, LG Battery 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 LG Battery will offset losses from the drop in LG Battery's long position.| UBS Fund vs. UBS Barclays Liquid | UBS Fund vs. UBS ETF Public | UBS Fund vs. UBS ETF SICAV | UBS Fund vs. UBS Fund Solutions |
| LG Battery vs. LG Battery Value Chain | LG Battery vs. iShares Govt Bond | LG Battery vs. Amundi MSCI Europe | LG Battery vs. iShares Global AAA AA |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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