Correlation Between UBS ETRACS and United States
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and United States 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 United States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and United States Oil, you can compare the effects of market volatilities on UBS ETRACS and United States 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 United States. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and United States.
Diversification Opportunities for UBS ETRACS and United States
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UBS and United is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and United States Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Oil 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Oil has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and United States go up and down completely randomly.
Pair Corralation between UBS ETRACS and United States
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the United States. In addition to that, UBS ETRACS is 2.09 times more volatile than United States Oil. It trades about -0.06 of its total potential returns per unit of risk. United States Oil is currently generating about 0.05 per unit of volatility. If you would invest 6,536 in United States Oil on January 21, 2024 and sell it today you would earn a total of 1,349 from holding United States Oil or generate 20.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
UBS ETRACS vs. United States Oil
Performance |
| Timeline |
| UBS ETRACS |
| United States Oil |
UBS ETRACS and United States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and United States
The main advantage of trading using opposite UBS ETRACS and United States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, United States 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 United States will offset losses from the drop in United States' long position.| UBS ETRACS vs. Drum Income Plus | UBS ETRACS vs. EA Series Trust | UBS ETRACS vs. Global X MLP | UBS ETRACS vs. ETRACS Quarterly Pay |
| United States vs. United States Natural | United States vs. SPDR Gold Shares | United States vs. ProShares Ultra Bloomberg | United States vs. Energy Select Sector |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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