Correlation Between Xtrackers and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 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 II and UBS ETF , you can compare the effects of market volatilities on Xtrackers 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 with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and UBS ETF.
Diversification Opportunities for Xtrackers and UBS ETF
Good diversification
The 3 months correlation between Xtrackers and UBS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers II and UBS ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF and Xtrackers 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 II 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 has no effect on the direction of Xtrackers i.e., Xtrackers and UBS ETF go up and down completely randomly.
Pair Corralation between Xtrackers and UBS ETF
Assuming the 90 days trading horizon Xtrackers II is expected to generate 0.5 times more return on investment than UBS ETF. However, Xtrackers II is 2.0 times less risky than UBS ETF. It trades about -0.01 of its potential returns per unit of risk. UBS ETF is currently generating about -0.07 per unit of risk. If you would invest 752.00 in Xtrackers II on September 3, 2024 and sell it today you would lose (1.00) from holding Xtrackers II or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.0% |
| Values | Daily Returns |
Xtrackers II vs. UBS ETF
Performance |
| Timeline |
| Xtrackers II |
| UBS ETF |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Xtrackers and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and UBS ETF
The main advantage of trading using opposite Xtrackers and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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 vs. Xtrackers II Global | Xtrackers vs. Xtrackers FTSE | Xtrackers vs. Xtrackers SP 500 | Xtrackers vs. Xtrackers MSCI |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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