Correlation Between UBS ETRACS and Pacer Funds
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Pacer Funds 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 Pacer Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and Pacer Funds Trust, you can compare the effects of market volatilities on UBS ETRACS and Pacer Funds 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 Pacer Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Pacer Funds.
Diversification Opportunities for UBS ETRACS and Pacer Funds
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Pacer is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Pacer Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Funds Trust 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 Pacer Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Funds Trust has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Pacer Funds go up and down completely randomly.
Pair Corralation between UBS ETRACS and Pacer Funds
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Pacer Funds. In addition to that, UBS ETRACS is 3.31 times more volatile than Pacer Funds Trust. It trades about -0.65 of its total potential returns per unit of risk. Pacer Funds Trust is currently generating about 0.11 per unit of volatility. If you would invest 2,658 in Pacer Funds Trust on October 24, 2024 and sell it today you would earn a total of 39.00 from holding Pacer Funds Trust or generate 1.47% 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. Pacer Funds Trust
Performance |
| Timeline |
| UBS ETRACS |
| Pacer Funds Trust |
UBS ETRACS and Pacer Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Pacer Funds
The main advantage of trading using opposite UBS ETRACS and Pacer Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Pacer Funds 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 Pacer Funds will offset losses from the drop in Pacer Funds' long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. American Beacon Select | UBS ETRACS vs. Direxion Daily Regional | UBS ETRACS vs. Direxion Daily SP |
| Pacer Funds vs. iShares Dividend and | Pacer Funds vs. Martin Currie Sustainable | Pacer Funds vs. VictoryShares THB Mid | Pacer Funds vs. Mast Global Battery |
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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