Correlation Between ETRACS Monthly and CHIS
Can any of the company-specific risk be diversified away by investing in both ETRACS Monthly and CHIS 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 Monthly and CHIS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRACS Monthly Pay and CHIS, you can compare the effects of market volatilities on ETRACS Monthly and CHIS 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 Monthly with a short position of CHIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRACS Monthly and CHIS.
Diversification Opportunities for ETRACS Monthly and CHIS
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETRACS and CHIS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding ETRACS Monthly Pay and CHIS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIS and ETRACS Monthly 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 Monthly Pay are associated (or correlated) with CHIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIS has no effect on the direction of ETRACS Monthly i.e., ETRACS Monthly and CHIS go up and down completely randomly.
Pair Corralation between ETRACS Monthly and CHIS
If you would invest 1,980 in ETRACS Monthly Pay on September 1, 2024 and sell it today you would earn a total of 80.00 from holding ETRACS Monthly Pay or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
ETRACS Monthly Pay vs. CHIS
Performance |
| Timeline |
| ETRACS Monthly Pay |
| CHIS |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ETRACS Monthly and CHIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRACS Monthly and CHIS
The main advantage of trading using opposite ETRACS Monthly and CHIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRACS Monthly position performs unexpectedly, CHIS 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 CHIS will offset losses from the drop in CHIS's long position.| ETRACS Monthly vs. ProShares VIX Mid Term | ETRACS Monthly vs. iPath Series B | ETRACS Monthly vs. ProShares Short Russell2000 |
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 Stocks Directory module to find actively traded stocks across global markets.
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