Correlation Between UBS ETRACS and WisdomTree International
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and WisdomTree International 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 WisdomTree International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and WisdomTree International Equity, you can compare the effects of market volatilities on UBS ETRACS and WisdomTree International 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 WisdomTree International. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and WisdomTree International.
Diversification Opportunities for UBS ETRACS and WisdomTree International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and WisdomTree is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and WisdomTree International Equit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree International 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 WisdomTree International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree International has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and WisdomTree International go up and down completely randomly.
Pair Corralation between UBS ETRACS and WisdomTree International
Given the investment horizon of 90 days UBS ETRACS is expected to generate 1.19 times less return on investment than WisdomTree International. In addition to that, UBS ETRACS is 6.84 times more volatile than WisdomTree International Equity. It trades about 0.01 of its total potential returns per unit of risk. WisdomTree International Equity is currently generating about 0.1 per unit of volatility. If you would invest 4,383 in WisdomTree International Equity on July 19, 2025 and sell it today you would earn a total of 2,283 from holding WisdomTree International Equity or generate 52.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. WisdomTree International Equit
Performance |
| Timeline |
| UBS ETRACS |
| WisdomTree International |
UBS ETRACS and WisdomTree International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and WisdomTree International
The main advantage of trading using opposite UBS ETRACS and WisdomTree International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, WisdomTree International 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 WisdomTree International will offset losses from the drop in WisdomTree International's long position.| UBS ETRACS vs. First Trust Exchange Traded | UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Horizon Kinetics Medical | UBS ETRACS vs. Harbor Health Care |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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