Correlation Between UBS and Alerian Energy
Can any of the company-specific risk be diversified away by investing in both UBS and Alerian Energy 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 and Alerian Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS and Alerian Energy Infrastructure, you can compare the effects of market volatilities on UBS and Alerian Energy 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 with a short position of Alerian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS and Alerian Energy.
Diversification Opportunities for UBS and Alerian Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UBS and Alerian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UBS and Alerian Energy Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alerian Energy Infra and UBS 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 are associated (or correlated) with Alerian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alerian Energy Infra has no effect on the direction of UBS i.e., UBS and Alerian Energy go up and down completely randomly.
Pair Corralation between UBS and Alerian Energy
If you would invest 2,906 in Alerian Energy Infrastructure on September 1, 2024 and sell it today you would earn a total of 364.00 from holding Alerian Energy Infrastructure or generate 12.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
UBS vs. Alerian Energy Infrastructure
Performance |
| Timeline |
| UBS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alerian Energy Infra |
UBS and Alerian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS and Alerian Energy
The main advantage of trading using opposite UBS and Alerian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS position performs unexpectedly, Alerian Energy 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 Alerian Energy will offset losses from the drop in Alerian Energy's long position.The idea behind UBS and Alerian Energy Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Alerian Energy vs. Global X MLP | Alerian Energy vs. Tortoise North American | Alerian Energy vs. First Trust North | Alerian Energy vs. Global X MLP |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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