Correlation Between UBS ETRACS and ProShares Online
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and ProShares Online 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 ProShares Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and ProShares Online Retail, you can compare the effects of market volatilities on UBS ETRACS and ProShares Online 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 ProShares Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and ProShares Online.
Diversification Opportunities for UBS ETRACS and ProShares Online
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and ProShares is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and ProShares Online Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Online Retail 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 ProShares Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Online Retail has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and ProShares Online go up and down completely randomly.
Pair Corralation between UBS ETRACS and ProShares Online
Given the investment horizon of 90 days UBS ETRACS is expected to generate 2.66 times more return on investment than ProShares Online. However, UBS ETRACS is 2.66 times more volatile than ProShares Online Retail. It trades about 0.19 of its potential returns per unit of risk. ProShares Online Retail 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 224.00 from holding UBS ETRACS or generate 13.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. ProShares Online Retail
Performance |
| Timeline |
| UBS ETRACS |
| ProShares Online Retail |
UBS ETRACS and ProShares Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and ProShares Online
The main advantage of trading using opposite UBS ETRACS and ProShares Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, ProShares Online 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 ProShares Online will offset losses from the drop in ProShares Online'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 |
| ProShares Online vs. Invesco Dynamic Building | ProShares Online vs. SCOR PK | ProShares Online vs. Morningstar Unconstrained Allocation | ProShares Online vs. Thrivent High Yield |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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