Correlation Between Vanguard FTSE and UBS MSCI
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and UBS MSCI 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 MSCI 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 MSCI Canada, you can compare the effects of market volatilities on Vanguard FTSE and UBS MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and UBS MSCI.
Diversification Opportunities for Vanguard FTSE and UBS MSCI
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vanguard and UBS is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and UBS MSCI Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS MSCI Canada 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS MSCI Canada has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and UBS MSCI go up and down completely randomly.
Pair Corralation between Vanguard FTSE and UBS MSCI
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to under-perform the UBS MSCI. In addition to that, Vanguard FTSE is 1.42 times more volatile than UBS MSCI Canada. It trades about -0.18 of its total potential returns per unit of risk. UBS MSCI Canada is currently generating about 0.42 per unit of volatility. If you would invest 348,650 in UBS MSCI Canada on August 30, 2024 and sell it today you would earn a total of 24,150 from holding UBS MSCI Canada or generate 6.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. UBS MSCI Canada
Performance |
| Timeline |
| Vanguard FTSE Developed |
| UBS MSCI Canada |
Vanguard FTSE and UBS MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and UBS MSCI
The main advantage of trading using opposite Vanguard FTSE and UBS MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, UBS MSCI 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 MSCI will offset losses from the drop in UBS MSCI's long position.| Vanguard FTSE vs. GraniteShares 3x Short | Vanguard FTSE vs. WisdomTree Natural Gas | Vanguard FTSE vs. Leverage Shares 3x | Vanguard FTSE vs. WisdomTree Natural Gas |
| UBS MSCI vs. UBS ETF | UBS MSCI vs. UBS ETF plc | UBS MSCI vs. UBS ETF plc | UBS MSCI vs. UBS Fund Solutions |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |