Correlation Between UBS ETF and Lyxor UCITS
Can any of the company-specific risk be diversified away by investing in both UBS ETF and Lyxor UCITS 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 ETF and Lyxor UCITS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETF MSCI and Lyxor UCITS Stoxx, you can compare the effects of market volatilities on UBS ETF and Lyxor UCITS 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 ETF with a short position of Lyxor UCITS. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and Lyxor UCITS.
Diversification Opportunities for UBS ETF and Lyxor UCITS
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UBS and Lyxor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and Lyxor UCITS Stoxx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyxor UCITS Stoxx and UBS ETF 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 ETF MSCI are associated (or correlated) with Lyxor UCITS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyxor UCITS Stoxx has no effect on the direction of UBS ETF i.e., UBS ETF and Lyxor UCITS go up and down completely randomly.
Pair Corralation between UBS ETF and Lyxor UCITS
Assuming the 90 days trading horizon UBS ETF MSCI is expected to under-perform the Lyxor UCITS. But the etf apears to be less risky and, when comparing its historical volatility, UBS ETF MSCI is 1.25 times less risky than Lyxor UCITS. The etf trades about -0.11 of its potential returns per unit of risk. The Lyxor UCITS Stoxx is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 5,334 in Lyxor UCITS Stoxx on September 24, 2024 and sell it today you would lose (38.00) from holding Lyxor UCITS Stoxx or give up 0.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.46% |
Values | Daily Returns |
UBS ETF MSCI vs. Lyxor UCITS Stoxx
Performance |
Timeline |
UBS ETF MSCI |
Lyxor UCITS Stoxx |
UBS ETF and Lyxor UCITS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UBS ETF and Lyxor UCITS
The main advantage of trading using opposite UBS ETF and Lyxor UCITS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, Lyxor UCITS 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 Lyxor UCITS will offset losses from the drop in Lyxor UCITS's long position.UBS ETF vs. UBSFund Solutions MSCI | UBS ETF vs. Vanguard SP 500 | UBS ETF vs. iShares VII PLC | UBS ETF vs. iShares Core SP |
Lyxor UCITS vs. UBSFund Solutions MSCI | Lyxor UCITS vs. Vanguard SP 500 | Lyxor UCITS vs. iShares VII PLC | Lyxor UCITS vs. iShares Core SP |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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