Correlation Between UBS Core and UBS ETF
Can any of the company-specific risk be diversified away by investing in both UBS Core 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 Core 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 Core MSCI and UBS ETF SMIM, you can compare the effects of market volatilities on UBS Core 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 Core with a short position of UBS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Core and UBS ETF.
Diversification Opportunities for UBS Core and UBS ETF
Poor diversification
The 3 months correlation between UBS and UBS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding UBS Core MSCI and UBS ETF SMIM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETF SMIM and UBS Core 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 Core MSCI 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 SMIM has no effect on the direction of UBS Core i.e., UBS Core and UBS ETF go up and down completely randomly.
Pair Corralation between UBS Core and UBS ETF
Assuming the 90 days trading horizon UBS Core MSCI is expected to generate 1.26 times more return on investment than UBS ETF. However, UBS Core is 1.26 times more volatile than UBS ETF SMIM. It trades about 0.15 of its potential returns per unit of risk. UBS ETF SMIM is currently generating about 0.01 per unit of risk. If you would invest 1,269 in UBS Core MSCI on June 5, 2025 and sell it today you would earn a total of 96.00 from holding UBS Core MSCI or generate 7.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS Core MSCI vs. UBS ETF SMIM
Performance |
| Timeline |
| UBS Core MSCI |
| UBS ETF SMIM |
UBS Core and UBS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS Core and UBS ETF
The main advantage of trading using opposite UBS Core and UBS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Core 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.| UBS Core vs. UBS ETF MSCI | UBS Core vs. UBS ETF plc | UBS Core vs. UBS SBI Foreign | UBS Core vs. UBS ETF SMIM |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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