Correlation Between UBS ETRACS and American Century
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and American Century 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 American Century into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and American Century Quality, you can compare the effects of market volatilities on UBS ETRACS and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and American Century.
Diversification Opportunities for UBS ETRACS and American Century
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and American is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and American Century Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Quality 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Quality has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and American Century go up and down completely randomly.
Pair Corralation between UBS ETRACS and American Century
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the American Century. In addition to that, UBS ETRACS is 8.45 times more volatile than American Century Quality. It trades about -0.01 of its total potential returns per unit of risk. American Century Quality is currently generating about 0.1 per unit of volatility. If you would invest 3,808 in American Century Quality on September 4, 2024 and sell it today you would earn a total of 919.00 from holding American Century Quality or generate 24.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.52% |
| Values | Daily Returns |
UBS ETRACS vs. American Century Quality
Performance |
| Timeline |
| UBS ETRACS |
| American Century Quality |
UBS ETRACS and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and American Century
The main advantage of trading using opposite UBS ETRACS and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| UBS ETRACS vs. ProShares UltraShort Bloomberg | UBS ETRACS vs. ProShares UltraShort Silver | UBS ETRACS vs. DB Gold Double | UBS ETRACS vs. MicroSectors Gold 3X |
| American Century vs. American Century ETF | American Century vs. American Century Quality | American Century vs. Rareview Dynamic Fixed | American Century vs. First Trust Exchange |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |