Correlation Between Vanguard FTSE and UBS Fund
Can any of the company-specific risk be diversified away by investing in both Vanguard FTSE 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 Vanguard FTSE and UBS Fund 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 Fund Solutions, you can compare the effects of market volatilities on Vanguard FTSE 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 Vanguard FTSE with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard FTSE and UBS Fund.
Diversification Opportunities for Vanguard FTSE and UBS Fund
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Vanguard and UBS is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed 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 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 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 Vanguard FTSE i.e., Vanguard FTSE and UBS Fund go up and down completely randomly.
Pair Corralation between Vanguard FTSE and UBS Fund
Assuming the 90 days trading horizon Vanguard FTSE Developed is expected to generate 1.14 times more return on investment than UBS Fund. However, Vanguard FTSE is 1.14 times more volatile than UBS Fund Solutions. It trades about 0.2 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.22 per unit of risk. If you would invest 4,699 in Vanguard FTSE Developed on September 13, 2024 and sell it today you would earn a total of 131.00 from holding Vanguard FTSE Developed or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard FTSE Developed vs. UBS Fund Solutions
Performance |
| Timeline |
| Vanguard FTSE Developed |
| UBS Fund Solutions |
Vanguard FTSE and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard FTSE and UBS Fund
The main advantage of trading using opposite Vanguard FTSE and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.| Vanguard FTSE vs. Leverage Shares 2x | Vanguard FTSE vs. Amundi Index Solutions | Vanguard FTSE vs. Amundi Index Solutions | Vanguard FTSE vs. Albion Venture Capital |
| UBS Fund vs. UBS ETF | UBS Fund vs. UBS ETF plc | UBS Fund vs. UBS ETF plc | UBS Fund vs. UBS Barclays Liquid |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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