Correlation Between UBS MSCI and UBS ETF

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

By analyzing existing cross correlation between UBS MSCI PACIFIC and UBS ETF , you can compare the effects of market volatilities on UBS MSCI 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 UBS MSCI with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS MSCI and UBS ETF.

Diversification Opportunities for UBS MSCI and UBS ETF

0.08

Correlation Coefficient

UBS MSCI  UBS ETF

Significant diversification

The 3 months correlation between UBS and UBS is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding UBS MSCI PACIFIC and UBS ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF and UBS MSCI 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 MSCI PACIFIC 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 has no effect on the direction of UBS MSCI i.e., UBS MSCI and UBS ETF go up and down completely randomly.

Pair Corralation between UBS MSCI and UBS ETF

Assuming the 90 days trading horizon UBS MSCI PACIFIC is expected to generate 93.14 times more return on investment than UBS ETF. However, UBS MSCI is 93.14 times more volatile than UBS ETF . It trades about 0.11 of its potential returns per unit of risk. UBS ETF is currently generating about 0.17 per unit of risk. If you would invest  127,360  in UBS MSCI PACIFIC on April 24, 2025 and sell it today you would earn a total of  13,110  from holding UBS MSCI PACIFIC or generate 10.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

UBS MSCI PACIFIC  vs.  UBS ETF

UBS MSCI PACIFIC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS MSCI PACIFIC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, UBS MSCI exhibited solid returns over the last few months and may actually be approaching a breakup point.

UBS ETF

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETF are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, UBS ETF unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UBS MSCI and UBS ETF

The main advantage of trading using opposite UBS MSCI and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS MSCI 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.

The idea behind UBS MSCI PACIFIC and UBS 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.