Correlation Between UBS ETRACS and FT Cboe
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and FT Cboe 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 FT Cboe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and FT Cboe Vest, you can compare the effects of market volatilities on UBS ETRACS and FT Cboe 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 FT Cboe. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and FT Cboe.
Diversification Opportunities for UBS ETRACS and FT Cboe
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and GSEP is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and FT Cboe Vest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Cboe Vest 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 FT Cboe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Cboe Vest has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and FT Cboe go up and down completely randomly.
Pair Corralation between UBS ETRACS and FT Cboe
Given the investment horizon of 90 days UBS ETRACS is expected to generate 3.61 times less return on investment than FT Cboe. In addition to that, UBS ETRACS is 11.23 times more volatile than FT Cboe Vest. It trades about 0.0 of its total potential returns per unit of risk. FT Cboe Vest is currently generating about 0.16 per unit of volatility. If you would invest 3,019 in FT Cboe Vest on September 12, 2024 and sell it today you would earn a total of 514.00 from holding FT Cboe Vest or generate 17.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.26% |
| Values | Daily Returns |
UBS ETRACS vs. FT Cboe Vest
Performance |
| Timeline |
| UBS ETRACS |
| FT Cboe Vest |
UBS ETRACS and FT Cboe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and FT Cboe
The main advantage of trading using opposite UBS ETRACS and FT Cboe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, FT Cboe 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 FT Cboe will offset losses from the drop in FT Cboe'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 |
| FT Cboe vs. FT Vest Equity | FT Cboe vs. Northern Lights | FT Cboe vs. Dimensional International High | FT Cboe 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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