Correlation Between Xtrackers MSCI and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers MSCI 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 Xtrackers MSCI and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers MSCI World and UBS ETF Public, you can compare the effects of market volatilities on Xtrackers MSCI 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 Xtrackers MSCI with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers MSCI and UBS ETF.
Diversification Opportunities for Xtrackers MSCI and UBS ETF
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtrackers and UBS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI World and UBS ETF Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF Public and Xtrackers MSCI 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 MSCI World 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 Public has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and UBS ETF go up and down completely randomly.
Pair Corralation between Xtrackers MSCI and UBS ETF
Assuming the 90 days trading horizon Xtrackers MSCI World is expected to under-perform the UBS ETF. In addition to that, Xtrackers MSCI is 12.01 times more volatile than UBS ETF Public. It trades about -0.03 of its total potential returns per unit of risk. UBS ETF Public is currently generating about 0.14 per unit of volatility. If you would invest 1,046 in UBS ETF Public on November 2, 2024 and sell it today you would earn a total of 5.00 from holding UBS ETF Public or generate 0.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Xtrackers MSCI World vs. UBS ETF Public
Performance |
| Timeline |
| Xtrackers MSCI World |
| UBS ETF Public |
Xtrackers MSCI and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers MSCI and UBS ETF
The main advantage of trading using opposite Xtrackers MSCI and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers MSCI 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.| Xtrackers MSCI vs. UBS Fund Solutions | Xtrackers MSCI vs. Xtrackers II | Xtrackers MSCI vs. Xtrackers Nikkei 225 | Xtrackers MSCI vs. iShares VII PLC |
| UBS ETF vs. UBS Fund Solutions | UBS ETF vs. Xtrackers II | UBS ETF vs. Xtrackers Nikkei 225 | UBS ETF 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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