Correlation Between Roundhill Magnificent and UBS ETRACS
Can any of the company-specific risk be diversified away by investing in both Roundhill Magnificent and UBS ETRACS 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 Roundhill Magnificent and UBS ETRACS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roundhill Magnificent Seven and UBS ETRACS , you can compare the effects of market volatilities on Roundhill Magnificent and UBS ETRACS 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 Roundhill Magnificent with a short position of UBS ETRACS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roundhill Magnificent and UBS ETRACS.
Diversification Opportunities for Roundhill Magnificent and UBS ETRACS
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Roundhill and UBS is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Roundhill Magnificent Seven and UBS ETRACS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETRACS and Roundhill Magnificent 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 Roundhill Magnificent Seven are associated (or correlated) with UBS ETRACS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS ETRACS has no effect on the direction of Roundhill Magnificent i.e., Roundhill Magnificent and UBS ETRACS go up and down completely randomly.
Pair Corralation between Roundhill Magnificent and UBS ETRACS
Given the investment horizon of 90 days Roundhill Magnificent Seven is expected to generate 0.4 times more return on investment than UBS ETRACS. However, Roundhill Magnificent Seven is 2.51 times less risky than UBS ETRACS. It trades about 0.25 of its potential returns per unit of risk. UBS ETRACS is currently generating about -0.21 per unit of risk. If you would invest 4,746 in Roundhill Magnificent Seven on September 1, 2024 and sell it today you would earn a total of 354.00 from holding Roundhill Magnificent Seven or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Roundhill Magnificent Seven vs. UBS ETRACS
Performance |
| Timeline |
| Roundhill Magnificent |
| UBS ETRACS |
Roundhill Magnificent and UBS ETRACS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roundhill Magnificent and UBS ETRACS
The main advantage of trading using opposite Roundhill Magnificent and UBS ETRACS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roundhill Magnificent position performs unexpectedly, UBS ETRACS 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 ETRACS will offset losses from the drop in UBS ETRACS's long position.| Roundhill Magnificent vs. Robo Global Robotics | Roundhill Magnificent vs. Bitwise Funds Trust | Roundhill Magnificent vs. FT Vest Equity | Roundhill Magnificent vs. Zillow Group Class |
| UBS ETRACS vs. First Trust Exchange Traded | UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Horizon Kinetics Medical | UBS ETRACS vs. Harbor Health Care |
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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