Correlation Between Xtrackers MSCI and UBS Fund

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

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

Diversification Opportunities for Xtrackers MSCI and UBS Fund

0.53

Correlation Coefficient

Xtrackers MSCI  UBS Fund

Very weak diversification

The 3 months correlation between Xtrackers and UBS is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers MSCI and UBS Fund Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Fund Solutions and Xtrackers 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 Xtrackers MSCI are associated (or correlated) with UBS Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Fund Solutions has no effect on the direction of Xtrackers MSCI i.e., Xtrackers MSCI and UBS Fund go up and down completely randomly.

Pair Corralation between Xtrackers MSCI and UBS Fund

Assuming the 90 days trading horizon Xtrackers MSCI is expected to generate 1.0 times more return on investment than UBS Fund. However, Xtrackers MSCI is 1.0 times more volatile than UBS Fund Solutions. It trades about 0.18 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.06 per unit of risk. If you would invest  713.00  in Xtrackers MSCI on April 22, 2025 and sell it today you would earn a total of  76.00  from holding Xtrackers MSCI or generate 10.66% return on investment over 90 days.

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

Xtrackers MSCI  vs.  UBS Fund Solutions

Xtrackers MSCI

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Xtrackers MSCI are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady forward-looking signals, Xtrackers MSCI may actually be approaching a critical reversion point that can send shares even higher in August 2025.

UBS Fund Solutions

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UBS Fund Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable primary indicators, UBS Fund is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Xtrackers MSCI and UBS Fund

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

The idea behind Xtrackers MSCI and UBS Fund Solutions 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.