Correlation Between Vanguard FTSE and UBS Barclays
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE and UBS Barclays 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 Barclays 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 Barclays Liquid, you can compare the effects of market volatilities on Vanguard FTSE and UBS Barclays 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 Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and UBS Barclays.
Diversification Opportunities for Vanguard FTSE and UBS Barclays
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vanguard and UBS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and UBS Barclays Liquid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Barclays Liquid 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 Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Barclays Liquid has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and UBS Barclays go up and down completely randomly.
Pair Corralation between Vanguard FTSE and UBS Barclays
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to under-perform the UBS Barclays. In addition to that, Vanguard FTSE is 2.5 times more volatile than UBS Barclays Liquid. It trades about -0.18 of its total potential returns per unit of risk. UBS Barclays Liquid is currently generating about 0.1 per unit of volatility. If you would invest 138,425 in UBS Barclays Liquid on August 30, 2024 and sell it today you would earn a total of 1,200 from holding UBS Barclays Liquid or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. UBS Barclays Liquid
Performance |
| Timeline |
| Vanguard FTSE Developed |
| UBS Barclays Liquid |
Vanguard FTSE and UBS Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and UBS Barclays
The main advantage of trading using opposite Vanguard FTSE and UBS Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE position performs unexpectedly, UBS Barclays 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 Barclays will offset losses from the drop in UBS Barclays' 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 Barclays vs. Leverage Shares 3x | UBS Barclays vs. Leverage Shares 3x | UBS Barclays vs. GraniteShares 3x Short | UBS Barclays vs. Leverage Shares 3x |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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