Correlation Between UBS ETRACS and VanEck CMCI
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and VanEck CMCI 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 VanEck CMCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and VanEck CMCI Commodity, you can compare the effects of market volatilities on UBS ETRACS and VanEck CMCI 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 VanEck CMCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and VanEck CMCI.
Diversification Opportunities for UBS ETRACS and VanEck CMCI
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and VanEck is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and VanEck CMCI Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck CMCI Commodity 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 VanEck CMCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck CMCI Commodity has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and VanEck CMCI go up and down completely randomly.
Pair Corralation between UBS ETRACS and VanEck CMCI
Given the investment horizon of 90 days UBS ETRACS is expected to generate 4.97 times more return on investment than VanEck CMCI. However, UBS ETRACS is 4.97 times more volatile than VanEck CMCI Commodity. It trades about 0.0 of its potential returns per unit of risk. VanEck CMCI Commodity is currently generating about -0.02 per unit of risk. If you would invest 1,710 in UBS ETRACS on September 3, 2024 and sell it today you would lose (105.00) from holding UBS ETRACS or give up 6.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. VanEck CMCI Commodity
Performance |
| Timeline |
| UBS ETRACS |
| VanEck CMCI Commodity |
UBS ETRACS and VanEck CMCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and VanEck CMCI
The main advantage of trading using opposite UBS ETRACS and VanEck CMCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, VanEck CMCI 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 VanEck CMCI will offset losses from the drop in VanEck CMCI's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. American Beacon Select | UBS ETRACS vs. Direxion Daily Regional | UBS ETRACS vs. Direxion Daily SP |
| VanEck CMCI vs. ETRACS Bloomberg Commodity | VanEck CMCI vs. Neuberger Berman Commodity | VanEck CMCI vs. abrdn Bloomberg All | VanEck CMCI vs. abrdn Bloomberg All |
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 Stocks Directory module to find actively traded stocks across global markets.
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