Correlation Between Nasdaq 100 and Ubs Ultra
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Ubs Ultra 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 Nasdaq 100 and Ubs Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Ubs Ultra Short, you can compare the effects of market volatilities on Nasdaq 100 and Ubs Ultra 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 Nasdaq 100 with a short position of Ubs Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Ubs Ultra.
Diversification Opportunities for Nasdaq 100 and Ubs Ultra
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nasdaq and Ubs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Ubs Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Ultra Short and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Ubs Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Ultra Short has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Ubs Ultra go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Ubs Ultra
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 13.62 times more return on investment than Ubs Ultra. However, Nasdaq 100 is 13.62 times more volatile than Ubs Ultra Short. It trades about 0.08 of its potential returns per unit of risk. Ubs Ultra Short is currently generating about 0.2 per unit of risk. If you would invest 4,664 in Nasdaq 100 Index Fund on September 1, 2024 and sell it today you would earn a total of 598.00 from holding Nasdaq 100 Index Fund or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Ubs Ultra Short
Performance |
| Timeline |
| Nasdaq 100 Index |
| Ubs Ultra Short |
Nasdaq 100 and Ubs Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Ubs Ultra
The main advantage of trading using opposite Nasdaq 100 and Ubs Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Ubs Ultra 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 Ultra will offset losses from the drop in Ubs Ultra's long position.| Nasdaq 100 vs. Alliancebernstein National Municipal | Nasdaq 100 vs. Nuveen Arizona Municipal | Nasdaq 100 vs. Bbh Intermediate Municipal | Nasdaq 100 vs. Old Westbury Municipal |
| Ubs Ultra vs. Pace Smallmedium Value | Ubs Ultra vs. Pace International Equity | Ubs Ultra vs. Pace International Equity | Ubs Ultra vs. Ubs Allocation Fund |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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