Correlation Between UBS ETF and VanEck Crypto

Can any of the company-specific risk be diversified away by investing in both UBS ETF and VanEck Crypto 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 VanEck Crypto into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UBS ETF Public and VanEck Crypto and, you can compare the effects of market volatilities on UBS ETF and VanEck Crypto 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 VanEck Crypto. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETF and VanEck Crypto.

Diversification Opportunities for UBS ETF and VanEck Crypto

0.77

Correlation Coefficient

UBS ETF  VanEck Crypto

Poor diversification

The 3 months correlation between UBS and VanEck is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF Public and VanEck Crypto and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Crypto 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 Public are associated (or correlated) with VanEck Crypto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Crypto has no effect on the direction of UBS ETF i.e., UBS ETF and VanEck Crypto go up and down completely randomly.

Pair Corralation between UBS ETF and VanEck Crypto

Assuming the 90 days trading horizon UBS ETF is expected to generate 8.06 times less return on investment than VanEck Crypto. But when comparing it to its historical volatility, UBS ETF Public is 4.04 times less risky than VanEck Crypto. It trades about 0.05 of its potential returns per unit of risk. VanEck Crypto and is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  179.00  in VanEck Crypto and on September 13, 2024 and sell it today you would earn a total of  1,014  from holding VanEck Crypto and or generate 566.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

UBS ETF Public  vs.  VanEck Crypto and

UBS ETF Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, UBS ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

VanEck Crypto

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Crypto and are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, VanEck Crypto reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UBS ETF and VanEck Crypto

The main advantage of trading using opposite UBS ETF and VanEck Crypto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETF position performs unexpectedly, VanEck Crypto 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 VanEck Crypto will offset losses from the drop in VanEck Crypto's long position.

The idea behind UBS ETF Public and VanEck Crypto and pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.