Correlation Between ETRACS 2xMonthly and UBS

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Can any of the company-specific risk be diversified away by investing in both ETRACS 2xMonthly and UBS 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 ETRACS 2xMonthly and UBS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS 2xMonthly Pay and UBS, you can compare the effects of market volatilities on ETRACS 2xMonthly and UBS 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 ETRACS 2xMonthly with a short position of UBS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS 2xMonthly and UBS.

Diversification Opportunities for ETRACS 2xMonthly and UBS

ETRACSUBSDiversified AwayETRACSUBSDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between ETRACS and UBS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS 2xMonthly Pay and UBS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UBS and ETRACS 2xMonthly 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 ETRACS 2xMonthly Pay are associated (or correlated) with UBS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UBS has no effect on the direction of ETRACS 2xMonthly i.e., ETRACS 2xMonthly and UBS go up and down completely randomly.

Pair Corralation between ETRACS 2xMonthly and UBS

If you would invest (100.00) in UBS on November 25, 2024 and sell it today you would earn a total of  100.00  from holding UBS or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

ETRACS 2xMonthly Pay  vs.  UBS

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-20246
JavaScript chart by amCharts 3.21.15PFFL MLPW
       Timeline  
ETRACS 2xMonthly Pay 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days ETRACS 2xMonthly Pay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, ETRACS 2xMonthly is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.68.899.29.49.69.8
UBS 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days UBS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, UBS is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

ETRACS 2xMonthly and UBS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.53-1.9-1.26-0.63-0.010.591.191.792.39 0.050.100.15
JavaScript chart by amCharts 3.21.15PFFL MLPW
       Returns  

Pair Trading with ETRACS 2xMonthly and UBS

The main advantage of trading using opposite ETRACS 2xMonthly and UBS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS 2xMonthly position performs unexpectedly, UBS 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 UBS will offset losses from the drop in UBS's long position.
The idea behind ETRACS 2xMonthly Pay and UBS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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