Correlation Between Microsoft and UBS Fund
Can any of the company-specific risk be diversified away by investing in both Microsoft 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 Microsoft and UBS Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and UBS Fund Solutions, you can compare the effects of market volatilities on Microsoft 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 Microsoft with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and UBS Fund.
Diversification Opportunities for Microsoft and UBS Fund
Poor diversification
The 3 months correlation between Microsoft and UBS is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft 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 Microsoft 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 Microsoft 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 Microsoft i.e., Microsoft and UBS Fund go up and down completely randomly.
Pair Corralation between Microsoft and UBS Fund
Given the investment horizon of 90 days Microsoft is expected to generate 2.24 times more return on investment than UBS Fund. However, Microsoft is 2.24 times more volatile than UBS Fund Solutions. It trades about 0.06 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.08 per unit of risk. If you would invest 33,297 in Microsoft on March 25, 2025 and sell it today you would earn a total of 15,303 from holding Microsoft or generate 45.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Microsoft vs. UBS Fund Solutions
Performance |
| Timeline |
| Microsoft |
| UBS Fund Solutions |
Microsoft and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and UBS Fund
The main advantage of trading using opposite Microsoft and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft 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.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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