Correlation Between UBS Fund and Xtrackers LevDAX
Can any of the company-specific risk be diversified away by investing in both UBS Fund and Xtrackers LevDAX 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 Xtrackers LevDAX 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 Xtrackers LevDAX, you can compare the effects of market volatilities on UBS Fund and Xtrackers LevDAX 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 Xtrackers LevDAX. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and Xtrackers LevDAX.
Diversification Opportunities for UBS Fund and Xtrackers LevDAX
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between UBS and Xtrackers is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and Xtrackers LevDAX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers LevDAX 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 Xtrackers LevDAX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers LevDAX has no effect on the direction of UBS Fund i.e., UBS Fund and Xtrackers LevDAX go up and down completely randomly.
Pair Corralation between UBS Fund and Xtrackers LevDAX
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 0.48 times more return on investment than Xtrackers LevDAX. However, UBS Fund Solutions is 2.08 times less risky than Xtrackers LevDAX. It trades about 0.24 of its potential returns per unit of risk. Xtrackers LevDAX is currently generating about -0.15 per unit of risk. If you would invest 4,968 in UBS Fund Solutions on August 28, 2024 and sell it today you would earn a total of 212.00 from holding UBS Fund Solutions or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
UBS Fund Solutions vs. Xtrackers LevDAX
Performance |
| Timeline |
| UBS Fund Solutions |
| Xtrackers LevDAX |
UBS Fund and Xtrackers LevDAX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and Xtrackers LevDAX
The main advantage of trading using opposite UBS Fund and Xtrackers LevDAX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, Xtrackers LevDAX 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 Xtrackers LevDAX will offset losses from the drop in Xtrackers LevDAX'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 |
| Xtrackers LevDAX vs. Xtrackers II Global | Xtrackers LevDAX vs. Xtrackers FTSE | Xtrackers LevDAX vs. Xtrackers SP 500 | Xtrackers LevDAX vs. Xtrackers MSCI |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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