Correlation Between UBS AG and Barclays ETN
Can any of the company-specific risk be diversified away by investing in both UBS AG and Barclays ETN 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 AG and Barclays ETN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS AG London and Barclays ETN Select, you can compare the effects of market volatilities on UBS AG and Barclays ETN 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 AG with a short position of Barclays ETN. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS AG and Barclays ETN.
Diversification Opportunities for UBS AG and Barclays ETN
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UBS and Barclays is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding UBS AG London and Barclays ETN Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays ETN Select and UBS AG 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 AG London are associated (or correlated) with Barclays ETN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays ETN Select has no effect on the direction of UBS AG i.e., UBS AG and Barclays ETN go up and down completely randomly.
Pair Corralation between UBS AG and Barclays ETN
Given the investment horizon of 90 days UBS AG is expected to generate 1.75 times less return on investment than Barclays ETN. But when comparing it to its historical volatility, UBS AG London is 1.05 times less risky than Barclays ETN. It trades about 0.08 of its potential returns per unit of risk. Barclays ETN Select is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,695 in Barclays ETN Select on August 28, 2024 and sell it today you would earn a total of 1,289 from holding Barclays ETN Select or generate 76.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS AG London vs. Barclays ETN Select
Performance |
| Timeline |
| UBS AG London |
| Barclays ETN Select |
UBS AG and Barclays ETN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS AG and Barclays ETN
The main advantage of trading using opposite UBS AG and Barclays ETN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS AG position performs unexpectedly, Barclays ETN 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 Barclays ETN will offset losses from the drop in Barclays ETN's long position.| UBS AG vs. UBS AG London | UBS AG vs. UBS AG London | UBS AG vs. ETRACS Quarterly Pay | UBS AG vs. VanEck BDC Income |
| Barclays ETN vs. Alerian Energy Infrastructure | Barclays ETN vs. UBS AG London | Barclays ETN vs. First Trust North | Barclays ETN vs. Tortoise North American |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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