Correlation Between Alerian Energy and UBS
Can any of the company-specific risk be diversified away by investing in both Alerian Energy and UBS 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 Alerian Energy and UBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alerian Energy Infrastructure and UBS, you can compare the effects of market volatilities on Alerian Energy and UBS 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 Alerian Energy with a short position of UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alerian Energy and UBS.
Diversification Opportunities for Alerian Energy and UBS
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Alerian and UBS is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Alerian Energy Infrastructure and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and Alerian Energy 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 Alerian Energy Infrastructure are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of Alerian Energy i.e., Alerian Energy and UBS go up and down completely randomly.
Pair Corralation between Alerian Energy and UBS
If you would invest 2,898 in Alerian Energy Infrastructure on August 28, 2024 and sell it today you would earn a total of 360.00 from holding Alerian Energy Infrastructure or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Alerian Energy Infrastructure vs. UBS
Performance |
| Timeline |
| Alerian Energy Infra |
| UBS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Alerian Energy and UBS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alerian Energy and UBS
The main advantage of trading using opposite Alerian Energy and UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alerian Energy position performs unexpectedly, UBS 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 will offset losses from the drop in UBS's long position.| Alerian Energy vs. UBS AG London | Alerian Energy vs. ETRACS 2xMonthly Pay | Alerian Energy vs. UBS AG London |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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