Correlation Between Xtrackers Nikkei and UBS Fund
Can any of the company-specific risk be diversified away by investing in both Xtrackers Nikkei 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 Xtrackers Nikkei and UBS Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Nikkei 225 and UBS Fund Solutions, you can compare the effects of market volatilities on Xtrackers Nikkei 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 Xtrackers Nikkei with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Nikkei and UBS Fund.
Diversification Opportunities for Xtrackers Nikkei and UBS Fund
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Xtrackers and UBS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Nikkei 225 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 Xtrackers Nikkei 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 Xtrackers Nikkei 225 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 Xtrackers Nikkei i.e., Xtrackers Nikkei and UBS Fund go up and down completely randomly.
Pair Corralation between Xtrackers Nikkei and UBS Fund
Assuming the 90 days trading horizon Xtrackers Nikkei 225 is expected to generate 1.57 times more return on investment than UBS Fund. However, Xtrackers Nikkei is 1.57 times more volatile than UBS Fund Solutions. It trades about 0.06 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.04 per unit of risk. If you would invest 2,167 in Xtrackers Nikkei 225 on September 12, 2024 and sell it today you would earn a total of 380.00 from holding Xtrackers Nikkei 225 or generate 17.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Nikkei 225 vs. UBS Fund Solutions
Performance |
| Timeline |
| Xtrackers Nikkei 225 |
| UBS Fund Solutions |
Xtrackers Nikkei and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Nikkei and UBS Fund
The main advantage of trading using opposite Xtrackers Nikkei and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Nikkei 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.| Xtrackers Nikkei vs. UBS Fund Solutions | Xtrackers Nikkei vs. Xtrackers II | Xtrackers Nikkei vs. iShares VII PLC | Xtrackers Nikkei vs. SPDR Gold Shares |
| UBS Fund vs. UBS Fund Solutions | UBS Fund vs. Xtrackers II | UBS Fund vs. Xtrackers Nikkei 225 | UBS Fund vs. iShares VII PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |