Correlation Between MicroSectorsTM Oil and UBS ETRACS
Can any of the company-specific risk be diversified away by investing in both MicroSectorsTM Oil 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 MicroSectorsTM Oil and UBS ETRACS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MicroSectorsTM Oil Gas and UBS ETRACS , you can compare the effects of market volatilities on MicroSectorsTM Oil 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 MicroSectorsTM Oil with a short position of UBS ETRACS. Check out your portfolio center. Please also check ongoing floating volatility patterns of MicroSectorsTM Oil and UBS ETRACS.
Diversification Opportunities for MicroSectorsTM Oil and UBS ETRACS
-0.98 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MicroSectorsTM and UBS is -0.98. Overlapping area represents the amount of risk that can be diversified away by holding MicroSectorsTM Oil Gas and UBS ETRACS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS ETRACS and MicroSectorsTM Oil 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 MicroSectorsTM Oil Gas 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 MicroSectorsTM Oil i.e., MicroSectorsTM Oil and UBS ETRACS go up and down completely randomly.
Pair Corralation between MicroSectorsTM Oil and UBS ETRACS
Given the investment horizon of 90 days MicroSectorsTM Oil Gas is expected to generate 1.02 times more return on investment than UBS ETRACS. However, MicroSectorsTM Oil is 1.02 times more volatile than UBS ETRACS . It trades about 0.01 of its potential returns per unit of risk. UBS ETRACS is currently generating about -0.01 per unit of risk. If you would invest 4,501 in MicroSectorsTM Oil Gas on August 30, 2024 and sell it today you would lose (849.00) from holding MicroSectorsTM Oil Gas or give up 18.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 90.93% |
| Values | Daily Returns |
MicroSectorsTM Oil Gas vs. UBS ETRACS
Performance |
| Timeline |
| MicroSectorsTM Oil Gas |
| UBS ETRACS |
MicroSectorsTM Oil and UBS ETRACS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MicroSectorsTM Oil and UBS ETRACS
The main advantage of trading using opposite MicroSectorsTM Oil and UBS ETRACS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroSectorsTM Oil 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.| MicroSectorsTM Oil vs. ABIVAX Socit Anonyme | MicroSectorsTM Oil vs. Morningstar Unconstrained Allocation | MicroSectorsTM Oil vs. SPACE | MicroSectorsTM Oil vs. Knife River |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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