Correlation Between UBS ETF and UBS Fund
Can any of the company-specific risk be diversified away by investing in both UBS ETF and UBS Fund 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 ETF and UBS Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF Public and UBS Fund Solutions, you can compare the effects of market volatilities on UBS ETF and UBS Fund 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 ETF with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and UBS Fund.
Diversification Opportunities for UBS ETF and UBS Fund
Weak diversification
The 3 months correlation between UBS and UBS is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF Public and UBS Fund Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Fund Solutions and UBS ETF 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 ETF Public are associated (or correlated) with UBS Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Fund Solutions has no effect on the direction of UBS ETF i.e., UBS ETF and UBS Fund go up and down completely randomly.
Pair Corralation between UBS ETF and UBS Fund
Assuming the 90 days trading horizon UBS ETF Public is expected to under-perform the UBS Fund. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF Public is 4.62 times less risky than UBS Fund. The etf trades about -0.03 of its potential returns per unit of risk. The UBS Fund Solutions is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 9,879 in UBS Fund Solutions on October 20, 2024 and sell it today you would earn a total of 639.00 from holding UBS Fund Solutions or generate 6.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETF Public vs. UBS Fund Solutions
Performance |
| Timeline |
| UBS ETF Public |
| UBS Fund Solutions |
UBS ETF and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETF and UBS Fund
The main advantage of trading using opposite UBS ETF and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, UBS Fund 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 UBS Fund will offset losses from the drop in UBS Fund's long position.| UBS ETF vs. UBS Fund Solutions | UBS ETF vs. Xtrackers II | UBS ETF vs. Xtrackers Nikkei 225 | UBS ETF vs. iShares VII PLC |
| UBS Fund vs. UBS Barclays Liquid | UBS Fund vs. UBS ETF Public | UBS Fund vs. UBS ETF SICAV | UBS Fund vs. UBS 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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