Correlation Between UBSFund Solutions and IShares SLI
Can any of the company-specific risk be diversified away by investing in both UBSFund Solutions and IShares SLI 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 UBSFund Solutions and IShares SLI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBSFund Solutions MSCI and iShares SLI ETF, you can compare the effects of market volatilities on UBSFund Solutions and IShares SLI 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 UBSFund Solutions with a short position of IShares SLI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBSFund Solutions and IShares SLI.
Diversification Opportunities for UBSFund Solutions and IShares SLI
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UBSFund and IShares is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding UBSFund Solutions MSCI and iShares SLI ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares SLI ETF and UBSFund Solutions 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 UBSFund Solutions MSCI are associated (or correlated) with IShares SLI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares SLI ETF has no effect on the direction of UBSFund Solutions i.e., UBSFund Solutions and IShares SLI go up and down completely randomly.
Pair Corralation between UBSFund Solutions and IShares SLI
Assuming the 90 days trading horizon UBSFund Solutions is expected to generate 1.53 times less return on investment than IShares SLI. But when comparing it to its historical volatility, UBSFund Solutions MSCI is 1.16 times less risky than IShares SLI. It trades about 0.15 of its potential returns per unit of risk. iShares SLI ETF is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 16,894 in iShares SLI ETF on January 26, 2024 and sell it today you would earn a total of 2,804 from holding iShares SLI ETF or generate 16.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBSFund Solutions MSCI vs. iShares SLI ETF
Performance |
| Timeline |
| UBSFund Solutions MSCI |
| iShares SLI ETF |
UBSFund Solutions and IShares SLI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBSFund Solutions and IShares SLI
The main advantage of trading using opposite UBSFund Solutions and IShares SLI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBSFund Solutions position performs unexpectedly, IShares SLI 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 IShares SLI will offset losses from the drop in IShares SLI's long position.The idea behind UBSFund Solutions MSCI and iShares SLI ETF 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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