Correlation Between Ubs Money and Target Retirement

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

By analyzing existing cross correlation between Ubs Money Series and Target Retirement Income, you can compare the effects of market volatilities on Ubs Money and Target Retirement 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 Money with a short position of Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs Money and Target Retirement.

Diversification Opportunities for Ubs Money and Target Retirement

0.0

Correlation Coefficient

Ubs Money  Target Retirement

Pay attention - limited upside

The 3 months correlation between Ubs and Target is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Money Series and Target Retirement Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement Income and Ubs Money 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 Money Series are associated (or correlated) with Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement Income has no effect on the direction of Ubs Money i.e., Ubs Money and Target Retirement go up and down completely randomly.

Pair Corralation between Ubs Money and Target Retirement

Assuming the 90 days horizon Ubs Money is expected to generate 2.02 times less return on investment than Target Retirement. But when comparing it to its historical volatility, Ubs Money Series is 2.47 times less risky than Target Retirement. It trades about 0.13 of its potential returns per unit of risk. Target Retirement Income is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  985.00  in Target Retirement Income on September 12, 2024 and sell it today you would earn a total of  130.00  from holding Target Retirement Income or generate 13.2% return on investment over 90 days.

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

Ubs Money Series  vs.  Target Retirement Income

Ubs Money Series

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ubs Money Series has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Ubs Money is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Target Retirement Income

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Target Retirement Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Target Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ubs Money and Target Retirement

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

The idea behind Ubs Money Series and Target Retirement Income 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.