Correlation Between IPath Series and ETRACS Monthly
Can any of the company-specific risk be diversified away by investing in both IPath Series and ETRACS Monthly 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 IPath Series and ETRACS Monthly into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and ETRACS Monthly Pay, you can compare the effects of market volatilities on IPath Series and ETRACS Monthly 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 IPath Series with a short position of ETRACS Monthly. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and ETRACS Monthly.
Diversification Opportunities for IPath Series and ETRACS Monthly
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPath and ETRACS is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and ETRACS Monthly Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETRACS Monthly Pay and IPath Series 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 iPath Series B are associated (or correlated) with ETRACS Monthly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETRACS Monthly Pay has no effect on the direction of IPath Series i.e., IPath Series and ETRACS Monthly go up and down completely randomly.
Pair Corralation between IPath Series and ETRACS Monthly
Considering the 90-day investment horizon iPath Series B is expected to under-perform the ETRACS Monthly. In addition to that, IPath Series is 4.65 times more volatile than ETRACS Monthly Pay. It trades about -0.03 of its total potential returns per unit of risk. ETRACS Monthly Pay is currently generating about 0.08 per unit of volatility. If you would invest 1,880 in ETRACS Monthly Pay on November 2, 2024 and sell it today you would earn a total of 146.00 from holding ETRACS Monthly Pay or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPath Series B vs. ETRACS Monthly Pay
Performance |
| Timeline |
| iPath Series B |
| ETRACS Monthly Pay |
IPath Series and ETRACS Monthly Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and ETRACS Monthly
The main advantage of trading using opposite IPath Series and ETRACS Monthly positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, ETRACS Monthly 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 ETRACS Monthly will offset losses from the drop in ETRACS Monthly's long position.| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
| ETRACS Monthly vs. ETRACS Quarterly Pay | ETRACS Monthly vs. Simplify Volatility Premium | ETRACS Monthly vs. ETRACS Monthly Pay | ETRACS Monthly vs. iShares Trust |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |