Correlation Between UBS ETRACS and JPMorgan Nasdaq
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and JPMorgan Nasdaq 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 JPMorgan Nasdaq into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and JPMorgan Nasdaq Equity, you can compare the effects of market volatilities on UBS ETRACS and JPMorgan Nasdaq 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 JPMorgan Nasdaq. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and JPMorgan Nasdaq.
Diversification Opportunities for UBS ETRACS and JPMorgan Nasdaq
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and JPMorgan is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and JPMorgan Nasdaq Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan Nasdaq Equity 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 JPMorgan Nasdaq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan Nasdaq Equity has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and JPMorgan Nasdaq go up and down completely randomly.
Pair Corralation between UBS ETRACS and JPMorgan Nasdaq
Given the investment horizon of 90 days UBS ETRACS is expected to generate 6.37 times more return on investment than JPMorgan Nasdaq. However, UBS ETRACS is 6.37 times more volatile than JPMorgan Nasdaq Equity. It trades about 0.16 of its potential returns per unit of risk. JPMorgan Nasdaq Equity is currently generating about 0.21 per unit of risk. If you would invest 1,650 in UBS ETRACS on September 12, 2024 and sell it today you would earn a total of 172.00 from holding UBS ETRACS or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
UBS ETRACS vs. JPMorgan Nasdaq Equity
Performance |
| Timeline |
| UBS ETRACS |
| JPMorgan Nasdaq Equity |
UBS ETRACS and JPMorgan Nasdaq Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and JPMorgan Nasdaq
The main advantage of trading using opposite UBS ETRACS and JPMorgan Nasdaq positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, JPMorgan Nasdaq 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 JPMorgan Nasdaq will offset losses from the drop in JPMorgan Nasdaq'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 |
| JPMorgan Nasdaq vs. JPMorgan Equity Premium | JPMorgan Nasdaq vs. Global X SP | JPMorgan Nasdaq vs. Amplify CWP Enhanced | JPMorgan Nasdaq vs. Global X Russell |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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