Correlation Between Ubs All and Ubs Emerging
Can any of the company-specific risk be diversified away by investing in both Ubs All and Ubs Emerging 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 Ubs All and Ubs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubs All China and Ubs Emerging Markets, you can compare the effects of market volatilities on Ubs All and Ubs Emerging 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 Ubs All with a short position of Ubs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs All and Ubs Emerging.
Diversification Opportunities for Ubs All and Ubs Emerging
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ubs and Ubs is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Ubs All China and Ubs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Emerging Markets and Ubs All 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 Ubs All China are associated (or correlated) with Ubs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Emerging Markets has no effect on the direction of Ubs All i.e., Ubs All and Ubs Emerging go up and down completely randomly.
Pair Corralation between Ubs All and Ubs Emerging
Assuming the 90 days horizon Ubs All China is expected to generate 1.66 times more return on investment than Ubs Emerging. However, Ubs All is 1.66 times more volatile than Ubs Emerging Markets. It trades about 0.49 of its potential returns per unit of risk. Ubs Emerging Markets is currently generating about 0.47 per unit of risk. If you would invest 405.00 in Ubs All China on February 16, 2024 and sell it today you would earn a total of 60.00 from holding Ubs All China or generate 14.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ubs All China vs. Ubs Emerging Markets
Performance |
Timeline |
Ubs All China |
Ubs Emerging Markets |
Ubs All and Ubs Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ubs All and Ubs Emerging
The main advantage of trading using opposite Ubs All and Ubs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubs All position performs unexpectedly, Ubs Emerging 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 Emerging will offset losses from the drop in Ubs Emerging's long position.Ubs All vs. Fidelity China Region | Ubs All vs. Matthews China Fund | Ubs All vs. Templeton China World | Ubs All vs. Templeton China World |
Ubs Emerging vs. Vanguard Emerging Markets | Ubs Emerging vs. American Funds New | Ubs Emerging vs. American Funds New | Ubs Emerging vs. New World Fund |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Fundamental Analysis View fundamental data based on most recent published financial statements | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |