Correlation Between UBS ETRACS and IShares Core
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and IShares Core 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 IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and iShares Core MSCI, you can compare the effects of market volatilities on UBS ETRACS and IShares Core 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 IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and IShares Core.
Diversification Opportunities for UBS ETRACS and IShares Core
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UBS and IShares is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and iShares Core MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core MSCI 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 IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core MSCI has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and IShares Core go up and down completely randomly.
Pair Corralation between UBS ETRACS and IShares Core
Given the investment horizon of 90 days UBS ETRACS is expected to generate 3.58 times more return on investment than IShares Core. However, UBS ETRACS is 3.58 times more volatile than iShares Core MSCI. It trades about 0.07 of its potential returns per unit of risk. iShares Core MSCI is currently generating about 0.0 per unit of risk. If you would invest 1,399 in UBS ETRACS on February 1, 2024 and sell it today you would earn a total of 59.00 from holding UBS ETRACS or generate 4.22% 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. iShares Core MSCI
Performance |
Timeline |
UBS ETRACS |
iShares Core MSCI |
UBS ETRACS and IShares Core Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with UBS ETRACS and IShares Core
The main advantage of trading using opposite UBS ETRACS and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's 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 |
IShares Core vs. Invesco PureBeta MSCI | IShares Core vs. HUMANA INC | IShares Core vs. Aquagold International | IShares Core vs. Barloworld Ltd ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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