Correlation Between Leverage Shares and UBSFund Solutions
Can any of the company-specific risk be diversified away by investing in both Leverage Shares and UBSFund Solutions 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 UBSFund Solutions 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 UBSFund Solutions Factor, you can compare the effects of market volatilities on Leverage Shares and UBSFund Solutions 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 UBSFund Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and UBSFund Solutions.
Diversification Opportunities for Leverage Shares and UBSFund Solutions
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leverage and UBSFund is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and UBSFund Solutions Factor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund Solutions Factor 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 UBSFund Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBSFund Solutions Factor has no effect on the direction of Leverage Shares i.e., Leverage Shares and UBSFund Solutions go up and down completely randomly.
Pair Corralation between Leverage Shares and UBSFund Solutions
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 16.01 times more return on investment than UBSFund Solutions. However, Leverage Shares is 16.01 times more volatile than UBSFund Solutions Factor. It trades about 0.1 of its potential returns per unit of risk. UBSFund Solutions Factor is currently generating about 0.03 per unit of risk. If you would invest 50,521 in Leverage Shares 3x on September 12, 2024 and sell it today you would earn a total of 170,279 from holding Leverage Shares 3x or generate 337.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Leverage Shares 3x vs. UBSFund Solutions Factor
Performance |
| Timeline |
| Leverage Shares 3x |
| UBSFund Solutions Factor |
Leverage Shares and UBSFund Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and UBSFund Solutions
The main advantage of trading using opposite Leverage Shares and UBSFund Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares position performs unexpectedly, UBSFund Solutions 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 UBSFund Solutions will offset losses from the drop in UBSFund Solutions' 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 |
| UBSFund Solutions vs. Leverage Shares 3x | UBSFund Solutions vs. Leverage Shares 3x | UBSFund Solutions vs. WisdomTree Natural Gas | UBSFund Solutions vs. SP 500 VIX |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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