Correlation Between Leverage Shares and UBS Fund
Can any of the company-specific risk be diversified away by investing in both Leverage Shares 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 Leverage Shares and UBS Fund 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 Fund Solutions, you can compare the effects of market volatilities on Leverage Shares 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 Leverage Shares with a short position of UBS Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and UBS Fund.
Diversification Opportunities for Leverage Shares and UBS Fund
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leverage and UBS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x 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 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 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 Leverage Shares i.e., Leverage Shares and UBS Fund go up and down completely randomly.
Pair Corralation between Leverage Shares and UBS Fund
Assuming the 90 days trading horizon Leverage Shares 3x is expected to generate 6.62 times more return on investment than UBS Fund. However, Leverage Shares is 6.62 times more volatile than UBS Fund Solutions. It trades about 0.13 of its potential returns per unit of risk. UBS Fund Solutions is currently generating about 0.03 per unit of risk. If you would invest 339,985 in Leverage Shares 3x on August 26, 2024 and sell it today you would earn a total of 2,981,625 from holding Leverage Shares 3x or generate 876.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. UBS Fund Solutions
Performance |
| Timeline |
| Leverage Shares 3x |
| UBS Fund Solutions |
Leverage Shares and UBS Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and UBS Fund
The main advantage of trading using opposite Leverage Shares and UBS Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares 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.| Leverage Shares vs. WisdomTree SP 500 | Leverage Shares vs. WisdomTree Silver 3x | Leverage Shares vs. GraniteShares FAANG ETC | Leverage Shares vs. Lyxor 10Y Inflation |
| UBS Fund vs. Leverage Shares 3x | UBS Fund vs. WisdomTree SP 500 | UBS Fund vs. WisdomTree Silver 3x | UBS Fund vs. Leverage Shares 3x |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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