Correlation Between UBS ETRACS and ETF Managers

Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and ETF Managers 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 ETF Managers into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UBS ETRACS and ETF Managers Group, you can compare the effects of market volatilities on UBS ETRACS and ETF Managers 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 ETF Managers. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and ETF Managers.

Diversification Opportunities for UBS ETRACS and ETF Managers

0.0

Correlation Coefficient

UBS ETRACS  ETF Managers

Pay attention - limited upside

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

Pair Corralation between UBS ETRACS and ETF Managers

If you would invest  2,738  in UBS ETRACS on October 7, 2024 and sell it today you would lose (776.00) from holding UBS ETRACS or give up 28.34% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.21%
Values	Daily Returns

UBS ETRACS   vs.  ETF Managers Group

UBS ETRACS

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETRACS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal forward indicators, UBS ETRACS exhibited solid returns over the last few months and may actually be approaching a breakup point.

ETF Managers Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ETF Managers Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, ETF Managers is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with UBS ETRACS and ETF Managers

The main advantage of trading using opposite UBS ETRACS and ETF Managers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, ETF Managers 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 ETF Managers will offset losses from the drop in ETF Managers' long position.

The idea behind UBS ETRACS and ETF Managers Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.