Correlation Between Leverage Shares and UBS Barclays
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and UBS Barclays 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 Leverage Shares and UBS Barclays into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and UBS Barclays Liquid, you can compare the effects of market volatilities on Leverage Shares and UBS Barclays 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 Leverage Shares with a short position of UBS Barclays. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and UBS Barclays.
Diversification Opportunities for Leverage Shares and UBS Barclays
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leverage and UBS is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and UBS Barclays Liquid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS Barclays Liquid and Leverage Shares 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 Leverage Shares 3x are associated (or correlated) with UBS Barclays. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS Barclays Liquid has no effect on the direction of Leverage Shares i.e., Leverage Shares and UBS Barclays go up and down completely randomly.
Pair Corralation between Leverage Shares and UBS Barclays
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 15.41 times more return on investment than UBS Barclays. However, Leverage Shares is 15.41 times more volatile than UBS Barclays Liquid. It trades about 0.04 of its potential returns per unit of risk. UBS Barclays Liquid is currently generating about 0.05 per unit of risk. If you would invest 3,108 in Leverage Shares 3x on September 2, 2024 and sell it today you would earn a total of 327.00 from holding Leverage Shares 3x or generate 10.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. UBS Barclays Liquid
Performance |
| Timeline |
| Leverage Shares 3x |
| UBS Barclays Liquid |
Leverage Shares and UBS Barclays Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and UBS Barclays
The main advantage of trading using opposite Leverage Shares and UBS Barclays positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, UBS Barclays 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 Barclays will offset losses from the drop in UBS Barclays' long position.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| UBS Barclays vs. UBS ETF | UBS Barclays vs. UBS ETF plc | UBS Barclays vs. UBS ETF plc | UBS Barclays vs. UBS Fund Solutions |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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