Correlation Between UBS ETRACS and Invesco BulletShares
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Invesco BulletShares 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 Invesco BulletShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and Invesco BulletShares 2025, you can compare the effects of market volatilities on UBS ETRACS and Invesco BulletShares 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 Invesco BulletShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Invesco BulletShares.
Diversification Opportunities for UBS ETRACS and Invesco BulletShares
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Invesco is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Invesco BulletShares 2025 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco BulletShares 2025 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 Invesco BulletShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco BulletShares 2025 has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Invesco BulletShares go up and down completely randomly.
Pair Corralation between UBS ETRACS and Invesco BulletShares
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Invesco BulletShares. In addition to that, UBS ETRACS is 28.86 times more volatile than Invesco BulletShares 2025. It trades about -0.01 of its total potential returns per unit of risk. Invesco BulletShares 2025 is currently generating about 0.08 per unit of volatility. If you would invest 2,333 in Invesco BulletShares 2025 on September 4, 2024 and sell it today you would earn a total of 127.00 from holding Invesco BulletShares 2025 or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.52% |
| Values | Daily Returns |
UBS ETRACS vs. Invesco BulletShares 2025
Performance |
| Timeline |
| UBS ETRACS |
| Invesco BulletShares 2025 |
UBS ETRACS and Invesco BulletShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Invesco BulletShares
The main advantage of trading using opposite UBS ETRACS and Invesco BulletShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Invesco BulletShares 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 Invesco BulletShares will offset losses from the drop in Invesco BulletShares' long position.| UBS ETRACS vs. ProShares UltraShort Bloomberg | UBS ETRACS vs. ProShares UltraShort Silver | UBS ETRACS vs. DB Gold Double | UBS ETRACS vs. MicroSectors Gold 3X |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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