Correlation Between Smallcap World and Ubs Us

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

By analyzing existing cross correlation between Smallcap World Fund and Ubs Dividend Ruler, you can compare the effects of market volatilities on Smallcap World and Ubs Us 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 Smallcap World with a short position of Ubs Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smallcap World and Ubs Us.

Diversification Opportunities for Smallcap World and Ubs Us

0.6

Correlation Coefficient

Smallcap World  Ubs Us

Poor diversification

The 3 months correlation between Smallcap and Ubs is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Smallcap World Fund and Ubs Dividend Ruler in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Dividend Ruler and Smallcap World 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 Smallcap World Fund are associated (or correlated) with Ubs Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Dividend Ruler has no effect on the direction of Smallcap World i.e., Smallcap World and Ubs Us go up and down completely randomly.

Pair Corralation between Smallcap World and Ubs Us

Assuming the 90 days horizon Smallcap World is expected to generate 1.08 times less return on investment than Ubs Us. In addition to that, Smallcap World is 1.23 times more volatile than Ubs Dividend Ruler. It trades about 0.16 of its total potential returns per unit of risk. Ubs Dividend Ruler is currently generating about 0.22 per unit of volatility. If you would invest  1,641  in Ubs Dividend Ruler on May 17, 2025 and sell it today you would earn a total of  140.00  from holding Ubs Dividend Ruler or generate 8.53% return on investment over 90 days.

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

Smallcap World Fund  vs.  Ubs Dividend Ruler

Smallcap World

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Smallcap World Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Smallcap World may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ubs Dividend Ruler

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs Dividend Ruler are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ubs Us may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Smallcap World and Ubs Us

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

The idea behind Smallcap World Fund and Ubs Dividend Ruler 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.