Correlation Between UBS ETRACS and Strategy Shares
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Strategy Shares 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 Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and Strategy Shares NewfoundReSolve, you can compare the effects of market volatilities on UBS ETRACS and Strategy Shares 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 Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Strategy Shares.
Diversification Opportunities for UBS ETRACS and Strategy Shares
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Strategy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Strategy Shares NewfoundReSolv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares Newf 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 Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares Newf has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Strategy Shares go up and down completely randomly.
Pair Corralation between UBS ETRACS and Strategy Shares
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Strategy Shares. In addition to that, UBS ETRACS is 5.08 times more volatile than Strategy Shares NewfoundReSolve. It trades about -0.16 of its total potential returns per unit of risk. Strategy Shares NewfoundReSolve is currently generating about 0.35 per unit of volatility. If you would invest 3,105 in Strategy Shares NewfoundReSolve on September 4, 2024 and sell it today you would earn a total of 160.00 from holding Strategy Shares NewfoundReSolve or generate 5.15% 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. Strategy Shares NewfoundReSolv
Performance |
| Timeline |
| UBS ETRACS |
| Strategy Shares Newf |
UBS ETRACS and Strategy Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Strategy Shares
The main advantage of trading using opposite UBS ETRACS and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' 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 |
| Strategy Shares vs. Inspire Tactical Balanced | Strategy Shares vs. Eaton Vance Enhanced | Strategy Shares vs. JPMorgan Chase Co | Strategy Shares vs. Walmart |
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.
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