Correlation Between Xtrackers and UBS Fund
Can any of the company-specific risk be diversified away by investing in both Xtrackers 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 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 SP 500 and UBS Fund Solutions, you can compare the effects of market volatilities on Xtrackers 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 with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers and UBS Fund.
Diversification Opportunities for Xtrackers and UBS Fund
Very poor diversification
The 3 months correlation between Xtrackers and UBS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers SP 500 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 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 SP 500 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 i.e., Xtrackers and UBS Fund go up and down completely randomly.
Pair Corralation between Xtrackers and UBS Fund
Assuming the 90 days trading horizon Xtrackers SP 500 is expected to generate 1.71 times more return on investment than UBS Fund. However, Xtrackers is 1.71 times more volatile than UBS Fund Solutions. It trades about 0.14 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.13 per unit of risk. If you would invest 22,410 in Xtrackers SP 500 on August 30, 2024 and sell it today you would earn a total of 1,900 from holding Xtrackers SP 500 or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers SP 500 vs. UBS Fund Solutions
Performance |
| Timeline |
| Xtrackers SP 500 |
| UBS Fund Solutions |
Xtrackers and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers and UBS Fund
The main advantage of trading using opposite Xtrackers and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers 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 vs. GraniteShares 3x Short | Xtrackers vs. WisdomTree Natural Gas | Xtrackers vs. Leverage Shares 3x | Xtrackers vs. WisdomTree Natural Gas |
| UBS Fund vs. GraniteShares 3x Short | UBS Fund vs. WisdomTree Natural Gas | UBS Fund vs. Leverage Shares 3x | UBS Fund vs. WisdomTree Natural Gas |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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