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 Bloomberg, 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
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leverage and UBSFund is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and UBSFund Solutions Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBSFund 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 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 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 37.85 times more return on investment than UBSFund Solutions. However, Leverage Shares is 37.85 times more volatile than UBSFund Solutions Bloomberg. It trades about 0.22 of its potential returns per unit of risk. UBSFund Solutions Bloomberg is currently generating about 0.23 per unit of risk. If you would invest 2,836,880 in Leverage Shares 3x on September 13, 2024 and sell it today you would earn a total of 1,487,430 from holding Leverage Shares 3x or generate 52.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Leverage Shares 3x vs. UBSFund Solutions Bloomberg
Performance |
| Timeline |
| Leverage Shares 3x |
| UBSFund Solutions |
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. WisdomTree Natural Gas | Leverage Shares vs. GraniteShares 3x Short | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 |
| UBSFund Solutions vs. Leverage Shares 3x | UBSFund Solutions vs. Leverage Shares 3x | UBSFund Solutions vs. Leverage Shares 3x | 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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