Correlation Between UBS ETRACS and IShares MSCI
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and IShares MSCI 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 ETRACS and IShares MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and iShares MSCI Global, you can compare the effects of market volatilities on UBS ETRACS and IShares MSCI 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 ETRACS with a short position of IShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and IShares MSCI.
Diversification Opportunities for UBS ETRACS and IShares MSCI
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and IShares is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and iShares MSCI Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares MSCI Global and UBS ETRACS 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 ETRACS are associated (or correlated) with IShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares MSCI Global has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and IShares MSCI go up and down completely randomly.
Pair Corralation between UBS ETRACS and IShares MSCI
Given the investment horizon of 90 days UBS ETRACS is expected to generate 14.59 times more return on investment than IShares MSCI. However, UBS ETRACS is 14.59 times more volatile than iShares MSCI Global. It trades about 0.02 of its potential returns per unit of risk. iShares MSCI Global is currently generating about 0.3 per unit of risk. If you would invest 2,026 in UBS ETRACS on November 3, 2024 and sell it today you would lose (68.00) from holding UBS ETRACS or give up 3.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
UBS ETRACS vs. iShares MSCI Global
Performance |
| Timeline |
| UBS ETRACS |
| iShares MSCI Global |
UBS ETRACS and IShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and IShares MSCI
The main advantage of trading using opposite UBS ETRACS and IShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, IShares MSCI 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 IShares MSCI will offset losses from the drop in IShares MSCI's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. American Beacon Select | UBS ETRACS vs. First Trust Indxx | UBS ETRACS vs. Direxion Daily SP |
| IShares MSCI vs. iShares MSCI Emerging | IShares MSCI vs. BMO Long Federal | IShares MSCI vs. iShares MSCI EAFE | IShares MSCI vs. Vanguard Total Market |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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