Correlation Between UBS ETRACS and PGIM Laddered
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and PGIM Laddered 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 PGIM Laddered into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and PGIM Laddered, you can compare the effects of market volatilities on UBS ETRACS and PGIM Laddered 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 PGIM Laddered. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and PGIM Laddered.
Diversification Opportunities for UBS ETRACS and PGIM Laddered
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and PGIM is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and PGIM Laddered in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Laddered 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 PGIM Laddered. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Laddered has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and PGIM Laddered go up and down completely randomly.
Pair Corralation between UBS ETRACS and PGIM Laddered
Given the investment horizon of 90 days UBS ETRACS is expected to generate 17.17 times more return on investment than PGIM Laddered. However, UBS ETRACS is 17.17 times more volatile than PGIM Laddered. It trades about 0.28 of its potential returns per unit of risk. PGIM Laddered is currently generating about 0.18 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. PGIM Laddered
Performance |
| Timeline |
| UBS ETRACS |
| PGIM Laddered |
UBS ETRACS and PGIM Laddered Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and PGIM Laddered
The main advantage of trading using opposite UBS ETRACS and PGIM Laddered positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, PGIM Laddered 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 PGIM Laddered will offset losses from the drop in PGIM Laddered'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 |
| PGIM Laddered vs. FT Vest Equity | PGIM Laddered vs. Northern Lights | PGIM Laddered vs. Dimensional International High | PGIM Laddered 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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