Correlation Between UBS Fund and IShares Nikkei
Can any of the company-specific risk be diversified away by investing in both UBS Fund and IShares Nikkei 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 IShares Nikkei 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 iShares Nikkei 225, you can compare the effects of market volatilities on UBS Fund and IShares Nikkei 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 IShares Nikkei. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and IShares Nikkei.
Diversification Opportunities for UBS Fund and IShares Nikkei
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UBS and IShares is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and iShares Nikkei 225 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Nikkei 225 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 IShares Nikkei. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Nikkei 225 has no effect on the direction of UBS Fund i.e., UBS Fund and IShares Nikkei go up and down completely randomly.
Pair Corralation between UBS Fund and IShares Nikkei
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 0.98 times more return on investment than IShares Nikkei. However, UBS Fund Solutions is 1.02 times less risky than IShares Nikkei. It trades about 0.04 of its potential returns per unit of risk. iShares Nikkei 225 is currently generating about 0.0 per unit of risk. If you would invest 5,166 in UBS Fund Solutions on October 20, 2024 and sell it today you would earn a total of 21.00 from holding UBS Fund Solutions or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Fund Solutions vs. iShares Nikkei 225
Performance |
| Timeline |
| UBS Fund Solutions |
| iShares Nikkei 225 |
UBS Fund and IShares Nikkei Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and IShares Nikkei
The main advantage of trading using opposite UBS Fund and IShares Nikkei positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, IShares Nikkei 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 Nikkei will offset losses from the drop in IShares Nikkei'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 |
| IShares Nikkei vs. iShares Govt Bond | IShares Nikkei vs. iShares Global AAA AA | IShares Nikkei vs. iShares Smart City | IShares Nikkei vs. iShares Broad High |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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