Correlation Between Xtrackers ShortDAX and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both Xtrackers ShortDAX and UBSFund Solutions 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 ShortDAX and UBSFund Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers ShortDAX Daily and UBSFund Solutions MSCI, you can compare the effects of market volatilities on Xtrackers ShortDAX and UBSFund Solutions 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 ShortDAX with a short position of UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers ShortDAX and UBSFund Solutions.
Diversification Opportunities for Xtrackers ShortDAX and UBSFund Solutions
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Xtrackers and UBSFund is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers ShortDAX Daily and UBSFund Solutions MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions MSCI and Xtrackers ShortDAX 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 ShortDAX Daily are associated (or correlated) with UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions MSCI has no effect on the direction of Xtrackers ShortDAX i.e., Xtrackers ShortDAX and UBSFund Solutions go up and down completely randomly.
Pair Corralation between Xtrackers ShortDAX and UBSFund Solutions
Assuming the 90 days trading horizon Xtrackers ShortDAX Daily is expected to under-perform the UBSFund Solutions. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers ShortDAX Daily is 1.1 times less risky than UBSFund Solutions. The etf trades about -0.06 of its potential returns per unit of risk. The UBSFund Solutions MSCI is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,639 in UBSFund Solutions MSCI on September 1, 2024 and sell it today you would earn a total of 33.00 from holding UBSFund Solutions MSCI or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Xtrackers ShortDAX Daily vs. UBSFund Solutions MSCI
Performance |
| Timeline |
| Xtrackers ShortDAX Daily |
| UBSFund Solutions MSCI |
Xtrackers ShortDAX and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers ShortDAX and UBSFund Solutions
The main advantage of trading using opposite Xtrackers ShortDAX and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers ShortDAX position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' long position.| Xtrackers ShortDAX vs. Xtrackers MSCI USA | Xtrackers ShortDAX vs. Xtrackers USD Corporate | Xtrackers ShortDAX vs. Xtrackers MSCI AC | Xtrackers ShortDAX vs. Xtrackers MSCI World |
| UBSFund Solutions vs. iShares Core SP | UBSFund Solutions vs. iShares Core MSCI | UBSFund Solutions vs. Lyxor UCITS Stoxx |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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