Correlation Between UBS ETF and PIMCO Short

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

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

Diversification Opportunities for UBS ETF and PIMCO Short

0.62

Correlation Coefficient

UBS ETF  PIMCO Short

Poor diversification

The 3 months correlation between UBS and PIMCO is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETF MSCI and PIMCO Short Term High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Short Term 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 MSCI are associated (or correlated) with PIMCO Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Short Term has no effect on the direction of UBS ETF i.e., UBS ETF and PIMCO Short go up and down completely randomly.

Pair Corralation between UBS ETF and PIMCO Short

Assuming the 90 days trading horizon UBS ETF MSCI is expected to generate 3.96 times more return on investment than PIMCO Short. However, UBS ETF is 3.96 times more volatile than PIMCO Short Term High. It trades about 0.12 of its potential returns per unit of risk. PIMCO Short Term High is currently generating about 0.29 per unit of risk. If you would invest  2,009  in UBS ETF MSCI on April 24, 2025 and sell it today you would earn a total of  92.00  from holding UBS ETF MSCI or generate 4.58% return on investment over 90 days.

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

UBS ETF MSCI  vs.  PIMCO Short Term High

UBS ETF MSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF MSCI are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, UBS ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

PIMCO Short Term

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO Short Term High are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, PIMCO Short is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with UBS ETF and PIMCO Short

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

The idea behind UBS ETF MSCI and PIMCO Short Term High 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.