Correlation Between UBS ETRACS and Alger ETF
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Alger ETF 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 Alger ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and The Alger ETF, you can compare the effects of market volatilities on UBS ETRACS and Alger ETF 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 Alger ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Alger ETF.
Diversification Opportunities for UBS ETRACS and Alger ETF
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Alger is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and The Alger ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger ETF 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 Alger ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger ETF has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Alger ETF go up and down completely randomly.
Pair Corralation between UBS ETRACS and Alger ETF
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Alger ETF. In addition to that, UBS ETRACS is 2.7 times more volatile than The Alger ETF. It trades about -0.01 of its total potential returns per unit of risk. The Alger ETF is currently generating about 0.12 per unit of volatility. If you would invest 2,011 in The Alger ETF on September 12, 2024 and sell it today you would earn a total of 615.00 from holding The Alger ETF or generate 30.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 49.15% |
| Values | Daily Returns |
UBS ETRACS vs. The Alger ETF
Performance |
| Timeline |
| UBS ETRACS |
| Alger ETF |
UBS ETRACS and Alger ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Alger ETF
The main advantage of trading using opposite UBS ETRACS and Alger ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Alger ETF 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 Alger ETF will offset losses from the drop in Alger ETF's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Direxion Daily SP | UBS ETRACS vs. EA Series Trust | UBS ETRACS vs. Global X MLP |
| Alger ETF vs. FT Vest Equity | Alger ETF vs. Northern Lights | Alger ETF vs. Dimensional International High | Alger ETF vs. JPMorgan Fundamental Data |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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