Correlation Between UBS ETF and UBS ETF

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

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

Diversification Opportunities for UBS ETF and UBS ETF

-0.35

Correlation Coefficient

UBS ETF  UBS ETF

Very good diversification

The 3 months correlation between UBS and UBS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF SMIM and UBS ETF SXI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF SXI 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 SMIM are associated (or correlated) with UBS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETF SXI has no effect on the direction of UBS ETF i.e., UBS ETF and UBS ETF go up and down completely randomly.

Pair Corralation between UBS ETF and UBS ETF

Assuming the 90 days trading horizon UBS ETF is expected to generate 7.09 times less return on investment than UBS ETF. But when comparing it to its historical volatility, UBS ETF SMIM is 1.19 times less risky than UBS ETF. It trades about 0.06 of its potential returns per unit of risk. UBS ETF SXI is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  3,435  in UBS ETF SXI on September 15, 2024 and sell it today you would earn a total of  187.00  from holding UBS ETF SXI or generate 5.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UBS ETF SMIM  vs.  UBS ETF SXI

UBS ETF SMIM

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS ETF SMIM has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong primary indicators, UBS ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

UBS ETF SXI

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF SXI are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, UBS ETF may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with UBS ETF and UBS ETF

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

The idea behind UBS ETF SMIM and UBS ETF SXI 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.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.