Correlation Between Xtrackers Switzerland and UBS ETF
Can any of the company-specific risk be diversified away by investing in both Xtrackers Switzerland 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 Xtrackers Switzerland and UBS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Switzerland UCITS and UBS ETF SMI, you can compare the effects of market volatilities on Xtrackers Switzerland 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 Xtrackers Switzerland with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Switzerland and UBS ETF.
Diversification Opportunities for Xtrackers Switzerland and UBS ETF
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Xtrackers and UBS is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Switzerland UCITS 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 Xtrackers Switzerland 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 Xtrackers Switzerland UCITS 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 Xtrackers Switzerland i.e., Xtrackers Switzerland and UBS ETF go up and down completely randomly.
Pair Corralation between Xtrackers Switzerland and UBS ETF
Assuming the 90 days trading horizon Xtrackers Switzerland UCITS is expected to under-perform the UBS ETF. But the etf apears to be less risky and, when comparing its historical volatility, Xtrackers Switzerland UCITS is 1.02 times less risky than UBS ETF. The etf trades about -0.01 of its potential returns per unit of risk. The UBS ETF SMI is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 11,582 in UBS ETF SMI on January 25, 2024 and sell it today you would earn a total of 176.00 from holding UBS ETF SMI or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Switzerland UCITS vs. UBS ETF SMI
Performance |
| Timeline |
| Xtrackers Switzerland |
| UBS ETF SMI |
Xtrackers Switzerland and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Switzerland and UBS ETF
The main advantage of trading using opposite Xtrackers Switzerland and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Switzerland 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.| Xtrackers Switzerland vs. Xtrackers MSCI USA | Xtrackers Switzerland vs. Xtrackers USD Corporate | Xtrackers Switzerland vs. Xtrackers MSCI AC | Xtrackers Switzerland vs. Xtrackers MSCI World |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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