Correlation Between Vanguard FTSE and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and UBS ETF 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 Vanguard FTSE and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard FTSE Developed and UBS ETF MSCI, you can compare the effects of market volatilities on Vanguard FTSE and UBS ETF 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 Vanguard FTSE with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and UBS ETF.
Diversification Opportunities for Vanguard FTSE and UBS ETF
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vanguard and UBS is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and UBS ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF MSCI and Vanguard FTSE 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 Vanguard FTSE Developed are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF MSCI has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and UBS ETF go up and down completely randomly.
Pair Corralation between Vanguard FTSE and UBS ETF
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to generate 1.39 times more return on investment than UBS ETF. However, Vanguard FTSE is 1.39 times more volatile than UBS ETF MSCI. It trades about 0.02 of its potential returns per unit of risk. UBS ETF MSCI is currently generating about -0.12 per unit of risk. If you would invest 2,260 in Vanguard FTSE Developed on August 30, 2024 and sell it today you would earn a total of 10.00 from holding Vanguard FTSE Developed or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. UBS ETF MSCI
Performance |
| Timeline |
| Vanguard FTSE Developed |
| UBS ETF MSCI |
Vanguard FTSE and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and UBS ETF
The main advantage of trading using opposite Vanguard FTSE and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, UBS ETF 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 ETF will offset losses from the drop in UBS ETF's long position.| Vanguard FTSE vs. UBSFund Solutions MSCI | Vanguard FTSE vs. iShares Core SP | Vanguard FTSE vs. Baloise Holding AG | Vanguard FTSE vs. Autoneum Holding AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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