Correlation Between Ubs Allocation and Ubs Emerging

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

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

Diversification Opportunities for Ubs Allocation and Ubs Emerging

0.98

Correlation Coefficient

Ubs Allocation  Ubs Emerging

Almost no diversification

The 3 months correlation between Ubs and Ubs is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Allocation Fund and Ubs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ubs Emerging Markets and Ubs Allocation 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 Allocation Fund are associated (or correlated) with Ubs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ubs Emerging Markets has no effect on the direction of Ubs Allocation i.e., Ubs Allocation and Ubs Emerging go up and down completely randomly.

Pair Corralation between Ubs Allocation and Ubs Emerging

Assuming the 90 days horizon Ubs Allocation is expected to generate 5.01 times less return on investment than Ubs Emerging. But when comparing it to its historical volatility, Ubs Allocation Fund is 1.24 times less risky than Ubs Emerging. It trades about 0.03 of its potential returns per unit of risk. Ubs Emerging Markets is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  773.00  in Ubs Emerging Markets on May 7, 2025 and sell it today you would earn a total of  120.00  from holding Ubs Emerging Markets or generate 15.52% return on investment over 90 days.

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

Ubs Allocation Fund  vs.  Ubs Emerging Markets

Ubs Allocation

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs Allocation Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ubs Allocation may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Ubs Emerging Markets

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ubs Emerging Markets are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ubs Emerging may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ubs Allocation and Ubs Emerging

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

The idea behind Ubs Allocation Fund and Ubs Emerging Markets 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.