Correlation Between IShares SLI and UBS ETF
Can any of the company-specific risk be diversified away by investing in both IShares SLI 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 IShares SLI and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SLI ETF and UBS ETF SMI, you can compare the effects of market volatilities on IShares SLI 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 IShares SLI with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SLI and UBS ETF.
Diversification Opportunities for IShares SLI and UBS ETF
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and UBS is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares SLI ETF and UBS ETF SMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF SMI and IShares SLI 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 iShares SLI ETF 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 SMI has no effect on the direction of IShares SLI i.e., IShares SLI and UBS ETF go up and down completely randomly.
Pair Corralation between IShares SLI and UBS ETF
Assuming the 90 days trading horizon iShares SLI ETF is expected to generate 1.15 times more return on investment than UBS ETF. However, IShares SLI is 1.15 times more volatile than UBS ETF SMI. It trades about 0.04 of its potential returns per unit of risk. UBS ETF SMI is currently generating about 0.02 per unit of risk. If you would invest 18,772 in iShares SLI ETF on January 24, 2024 and sell it today you would earn a total of 784.00 from holding iShares SLI ETF or generate 4.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SLI ETF vs. UBS ETF SMI
Performance |
| Timeline |
| iShares SLI ETF |
| UBS ETF SMI |
IShares SLI and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SLI and UBS ETF
The main advantage of trading using opposite IShares SLI and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SLI 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.| IShares SLI vs. iShares Corp Bond | IShares SLI vs. iShares Emerging Asia | IShares SLI vs. iShares Corp Bond | IShares SLI vs. iShares MSCI Global |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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