Correlation Between UBS Fund and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both UBS Fund and SPDR Gold 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 SPDR Gold 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 SPDR Gold Shares, you can compare the effects of market volatilities on UBS Fund and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Fund and SPDR Gold.
Diversification Opportunities for UBS Fund and SPDR Gold
Very poor diversification
The 3 months correlation between UBS and SPDR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding UBS Fund Solutions and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of UBS Fund i.e., UBS Fund and SPDR Gold go up and down completely randomly.
Pair Corralation between UBS Fund and SPDR Gold
Assuming the 90 days trading horizon UBS Fund Solutions is expected to generate 0.49 times more return on investment than SPDR Gold. However, UBS Fund Solutions is 2.03 times less risky than SPDR Gold. It trades about 0.31 of its potential returns per unit of risk. SPDR Gold Shares is currently generating about 0.0 per unit of risk. If you would invest 9,523 in UBS Fund Solutions on September 1, 2024 and sell it today you would earn a total of 399.00 from holding UBS Fund Solutions or generate 4.19% 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. SPDR Gold Shares
Performance |
| Timeline |
| UBS Fund Solutions |
| SPDR Gold Shares |
UBS Fund and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Fund and SPDR Gold
The main advantage of trading using opposite UBS Fund and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Fund position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold'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 plc |
| SPDR Gold vs. SPDR Barclays 10 | SPDR Gold vs. SPDR ICE BofA | SPDR Gold vs. SPDR SP Utilities | SPDR Gold vs. SPDR ICE BofA |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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