Correlation Between UBS ETRACS and SGI Enhanced
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and SGI Enhanced 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 SGI Enhanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and SGI Enhanced Nasdaq 100, you can compare the effects of market volatilities on UBS ETRACS and SGI Enhanced 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 SGI Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and SGI Enhanced.
Diversification Opportunities for UBS ETRACS and SGI Enhanced
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UBS and SGI is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and SGI Enhanced Nasdaq 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGI Enhanced Nasdaq 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 SGI Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGI Enhanced Nasdaq has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and SGI Enhanced go up and down completely randomly.
Pair Corralation between UBS ETRACS and SGI Enhanced
Given the investment horizon of 90 days UBS ETRACS is expected to generate 3.72 times more return on investment than SGI Enhanced. However, UBS ETRACS is 3.72 times more volatile than SGI Enhanced Nasdaq 100. It trades about 0.04 of its potential returns per unit of risk. SGI Enhanced Nasdaq 100 is currently generating about 0.05 per unit of risk. If you would invest 1,871 in UBS ETRACS on December 2, 2024 and sell it today you would earn a total of 358.00 from holding UBS ETRACS or generate 19.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.06% |
| Values | Daily Returns |
UBS ETRACS vs. SGI Enhanced Nasdaq 100
Performance |
| Timeline |
| UBS ETRACS |
| SGI Enhanced Nasdaq |
UBS ETRACS and SGI Enhanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and SGI Enhanced
The main advantage of trading using opposite UBS ETRACS and SGI Enhanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, SGI Enhanced 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 SGI Enhanced will offset losses from the drop in SGI Enhanced's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. American Beacon Select | UBS ETRACS vs. First Trust Indxx | UBS ETRACS vs. Direxion Daily Regional |
| SGI Enhanced vs. FT Vest Equity | SGI Enhanced vs. Northern Lights | SGI Enhanced vs. Dimensional International High | SGI Enhanced vs. First Trust Exchange Traded |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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