Correlation Between UBS Fund and Lyxor TIPS
Can any of the company-specific risk be diversified away by investing in both UBS Fund and Lyxor TIPS 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 TIPS 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 TIPS DR, you can compare the effects of market volatilities on UBS Fund and Lyxor TIPS 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 TIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and Lyxor TIPS.
Diversification Opportunities for UBS Fund and Lyxor TIPS
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UBS and Lyxor is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and Lyxor TIPS DR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor TIPS DR 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 TIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor TIPS DR has no effect on the direction of UBS Fund i.e., UBS Fund and Lyxor TIPS go up and down completely randomly.
Pair Corralation between UBS Fund and Lyxor TIPS
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 2.77 times more return on investment than Lyxor TIPS. However, UBS Fund is 2.77 times more volatile than Lyxor TIPS DR. It trades about 0.06 of its potential returns per unit of risk. Lyxor TIPS DR is currently generating about 0.06 per unit of risk. If you would invest 4,481 in UBS Fund Solutions on August 31, 2024 and sell it today you would earn a total of 684.00 from holding UBS Fund Solutions or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Fund Solutions vs. Lyxor TIPS DR
Performance |
| Timeline |
| UBS Fund Solutions |
| Lyxor TIPS DR |
UBS Fund and Lyxor TIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and Lyxor TIPS
The main advantage of trading using opposite UBS Fund and Lyxor TIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, Lyxor TIPS 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 TIPS will offset losses from the drop in Lyxor TIPS'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 TIPS vs. UBS Fund Solutions | Lyxor TIPS vs. Xtrackers II | Lyxor TIPS vs. Xtrackers Nikkei 225 | Lyxor TIPS vs. iShares VII PLC |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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