Correlation Between UBS ETRACS and IPath Bloomberg
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and IPath Bloomberg 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 IPath Bloomberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and iPath Bloomberg Commodity, you can compare the effects of market volatilities on UBS ETRACS and IPath Bloomberg 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 IPath Bloomberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and IPath Bloomberg.
Diversification Opportunities for UBS ETRACS and IPath Bloomberg
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and IPath is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and iPath Bloomberg Commodity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iPath Bloomberg 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 IPath Bloomberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iPath Bloomberg Commodity has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and IPath Bloomberg go up and down completely randomly.
Pair Corralation between UBS ETRACS and IPath Bloomberg
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the IPath Bloomberg. In addition to that, UBS ETRACS is 4.13 times more volatile than iPath Bloomberg Commodity. It trades about -0.03 of its total potential returns per unit of risk. iPath Bloomberg Commodity is currently generating about 0.02 per unit of volatility. If you would invest 3,001 in iPath Bloomberg Commodity on September 4, 2024 and sell it today you would earn a total of 172.00 from holding iPath Bloomberg Commodity or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
UBS ETRACS vs. iPath Bloomberg Commodity
Performance |
| Timeline |
| UBS ETRACS |
| iPath Bloomberg Commodity |
UBS ETRACS and IPath Bloomberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and IPath Bloomberg
The main advantage of trading using opposite UBS ETRACS and IPath Bloomberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, IPath Bloomberg 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 IPath Bloomberg will offset losses from the drop in IPath Bloomberg's 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 |
| IPath Bloomberg vs. abrdn Bloomberg All | IPath Bloomberg vs. GraniteShares Bloomberg Commodity | IPath Bloomberg vs. iShares Commodity Curve | IPath Bloomberg 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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