Correlation Between UBS Fund and Lyxor BofAML
Can any of the company-specific risk be diversified away by investing in both UBS Fund and Lyxor BofAML 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 Lyxor BofAML 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 Lyxor BofAML USD, you can compare the effects of market volatilities on UBS Fund and Lyxor BofAML 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 Lyxor BofAML. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and Lyxor BofAML.
Diversification Opportunities for UBS Fund and Lyxor BofAML
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UBS and Lyxor is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and Lyxor BofAML USD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor BofAML USD 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 Lyxor BofAML. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor BofAML USD has no effect on the direction of UBS Fund i.e., UBS Fund and Lyxor BofAML go up and down completely randomly.
Pair Corralation between UBS Fund and Lyxor BofAML
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 3.53 times more return on investment than Lyxor BofAML. However, UBS Fund is 3.53 times more volatile than Lyxor BofAML USD. It trades about 0.26 of its potential returns per unit of risk. Lyxor BofAML USD is currently generating about 0.31 per unit of risk. If you would invest 4,973 in UBS Fund Solutions on September 2, 2024 and sell it today you would earn a total of 238.00 from holding UBS Fund Solutions or generate 4.79% 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. Lyxor BofAML USD
Performance |
| Timeline |
| UBS Fund Solutions |
| Lyxor BofAML USD |
UBS Fund and Lyxor BofAML Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and Lyxor BofAML
The main advantage of trading using opposite UBS Fund and Lyxor BofAML positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, Lyxor BofAML 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 Lyxor BofAML will offset losses from the drop in Lyxor BofAML'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 |
| Lyxor BofAML vs. UBS Fund Solutions | Lyxor BofAML vs. Vanguard Funds Public | Lyxor BofAML vs. iShares Core SP | Lyxor BofAML vs. iShares Core 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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