Correlation Between UBS ETRACS and DB Gold
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and DB Gold 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 DB Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and DB Gold Double, you can compare the effects of market volatilities on UBS ETRACS and DB Gold 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 DB Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and DB Gold.
Diversification Opportunities for UBS ETRACS and DB Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBS and DGP is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and DB Gold Double in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Gold Double 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 DB Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Gold Double has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and DB Gold go up and down completely randomly.
Pair Corralation between UBS ETRACS and DB Gold
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the DB Gold. In addition to that, UBS ETRACS is 1.78 times more volatile than DB Gold Double. It trades about -0.07 of its total potential returns per unit of risk. DB Gold Double is currently generating about 0.0 per unit of volatility. If you would invest 6,714 in DB Gold Double on August 29, 2024 and sell it today you would lose (80.00) from holding DB Gold Double or give up 1.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. DB Gold Double
Performance |
| Timeline |
| UBS ETRACS |
| DB Gold Double |
UBS ETRACS and DB Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and DB Gold
The main advantage of trading using opposite UBS ETRACS and DB Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, DB Gold 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 DB Gold will offset losses from the drop in DB Gold's long position.| UBS ETRACS vs. First Trust Exchange Traded | UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Horizon Kinetics Medical | UBS ETRACS vs. Harbor Health Care |
| DB Gold vs. DB Gold Double | DB Gold vs. ProShares Ultra Gold | DB Gold vs. DB Gold Short | DB Gold vs. ProShares Ultra Silver |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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