Correlation Between Ubs Ultra and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Ubs Ultra and Pace Municipal 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 Ultra and Pace Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ubs Ultra Short and Pace Municipal Fixed, you can compare the effects of market volatilities on Ubs Ultra and Pace Municipal 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 Ultra with a short position of Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ubs Ultra and Pace Municipal.
Diversification Opportunities for Ubs Ultra and Pace Municipal
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ubs and Pace is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ubs Ultra Short and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed and Ubs Ultra 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 Ultra Short are associated (or correlated) with Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Ubs Ultra i.e., Ubs Ultra and Pace Municipal go up and down completely randomly.
Pair Corralation between Ubs Ultra and Pace Municipal
Assuming the 90 days horizon Ubs Ultra Short is expected to generate 0.42 times more return on investment than Pace Municipal. However, Ubs Ultra Short is 2.4 times less risky than Pace Municipal. It trades about 0.22 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.03 per unit of risk. If you would invest 890.00 in Ubs Ultra Short on April 21, 2025 and sell it today you would earn a total of 95.00 from holding Ubs Ultra Short or generate 10.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ubs Ultra Short vs. Pace Municipal Fixed
Performance |
| Timeline |
| Ubs Ultra Short |
| Pace Municipal Fixed |
Ubs Ultra and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ubs Ultra and Pace Municipal
The main advantage of trading using opposite Ubs Ultra and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ubs Ultra position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| Ubs Ultra vs. Gabelli Convertible And | Ubs Ultra vs. Allianzgi Convertible Income | Ubs Ultra vs. Lord Abbett Convertible | Ubs Ultra vs. Putnam Convertible Securities |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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