Correlation Between UBS ETRACS and MicroSectors Travel
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and MicroSectors Travel 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 MicroSectors Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and MicroSectors Travel 3X, you can compare the effects of market volatilities on UBS ETRACS and MicroSectors Travel 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 MicroSectors Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and MicroSectors Travel.
Diversification Opportunities for UBS ETRACS and MicroSectors Travel
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and MicroSectors is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and MicroSectors Travel 3X in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors Travel 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 MicroSectors Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors Travel has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and MicroSectors Travel go up and down completely randomly.
Pair Corralation between UBS ETRACS and MicroSectors Travel
Given the investment horizon of 90 days UBS ETRACS is expected to generate 1.21 times more return on investment than MicroSectors Travel. However, UBS ETRACS is 1.21 times more volatile than MicroSectors Travel 3X. It trades about 0.28 of its potential returns per unit of risk. MicroSectors Travel 3X is currently generating about 0.1 per unit of risk. If you would invest 1,607 in UBS ETRACS on September 14, 2024 and sell it today you would earn a total of 299.00 from holding UBS ETRACS or generate 18.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. MicroSectors Travel 3X
Performance |
| Timeline |
| UBS ETRACS |
| MicroSectors Travel |
UBS ETRACS and MicroSectors Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and MicroSectors Travel
The main advantage of trading using opposite UBS ETRACS and MicroSectors Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, MicroSectors Travel 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 MicroSectors Travel will offset losses from the drop in MicroSectors Travel'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 |
| MicroSectors Travel vs. MicroSectors Travel 3X | MicroSectors Travel vs. MicroSectors Gold Miners | MicroSectors Travel vs. Direxion Daily Travel | MicroSectors Travel vs. MicroSectors Solactive FANG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |