Correlation Between UBS ETRACS and GraniteShares 175x

Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and GraniteShares 175x 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 GraniteShares 175x into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UBS ETRACS and GraniteShares 175x Long, you can compare the effects of market volatilities on UBS ETRACS and GraniteShares 175x 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 GraniteShares 175x. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and GraniteShares 175x.

Diversification Opportunities for UBS ETRACS and GraniteShares 175x

0.5

Correlation Coefficient

UBS ETRACS  GraniteShares 175x

Very weak diversification

The 3 months correlation between UBS and GraniteShares is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and GraniteShares 175x Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 175x Long 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 GraniteShares 175x. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 175x Long has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and GraniteShares 175x go up and down completely randomly.

Pair Corralation between UBS ETRACS and GraniteShares 175x

Given the investment horizon of 90 days UBS ETRACS is expected to generate 0.92 times more return on investment than GraniteShares 175x. However, UBS ETRACS is 1.09 times less risky than GraniteShares 175x. It trades about 0.11 of its potential returns per unit of risk. GraniteShares 175x Long is currently generating about -0.07 per unit of risk. If you would invest  1,629  in UBS ETRACS on December 2, 2024 and sell it today you would earn a total of  600.00  from holding UBS ETRACS or generate 36.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

UBS ETRACS   vs.  GraniteShares 175x Long

UBS ETRACS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UBS ETRACS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward indicators, UBS ETRACS exhibited solid returns over the last few months and may actually be approaching a breakup point.

GraniteShares 175x Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares 175x Long has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Etf's essential indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Pair Trading with UBS ETRACS and GraniteShares 175x

The main advantage of trading using opposite UBS ETRACS and GraniteShares 175x positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, GraniteShares 175x 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 GraniteShares 175x will offset losses from the drop in GraniteShares 175x's long position.

The idea behind UBS ETRACS and GraniteShares 175x Long 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.