Correlation Between ETRACS Quarterly and UBS AG
Can any of the company-specific risk be diversified away by investing in both ETRACS Quarterly and UBS AG 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 ETRACS Quarterly and UBS AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS Quarterly Pay and UBS AG London, you can compare the effects of market volatilities on ETRACS Quarterly and UBS AG 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 ETRACS Quarterly with a short position of UBS AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS Quarterly and UBS AG.
Diversification Opportunities for ETRACS Quarterly and UBS AG
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between ETRACS and UBS is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS Quarterly Pay and UBS AG London in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS AG London and ETRACS Quarterly 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 ETRACS Quarterly Pay are associated (or correlated) with UBS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS AG London has no effect on the direction of ETRACS Quarterly i.e., ETRACS Quarterly and UBS AG go up and down completely randomly.
Pair Corralation between ETRACS Quarterly and UBS AG
Given the investment horizon of 90 days ETRACS Quarterly Pay is expected to generate 1.85 times more return on investment than UBS AG. However, ETRACS Quarterly is 1.85 times more volatile than UBS AG London. It trades about 0.39 of its potential returns per unit of risk. UBS AG London is currently generating about 0.51 per unit of risk. If you would invest 5,508 in ETRACS Quarterly Pay on September 4, 2024 and sell it today you would earn a total of 982.00 from holding ETRACS Quarterly Pay or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ETRACS Quarterly Pay vs. UBS AG London
Performance |
| Timeline |
| ETRACS Quarterly Pay |
| UBS AG London |
ETRACS Quarterly and UBS AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS Quarterly and UBS AG
The main advantage of trading using opposite ETRACS Quarterly and UBS AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS Quarterly position performs unexpectedly, UBS AG 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 AG will offset losses from the drop in UBS AG's long position.| ETRACS Quarterly vs. ETRACS Quarterly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. ETRACS Monthly Pay | ETRACS Quarterly vs. UBS AG London |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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