Correlation Between UBS ETRACS and Amplify International
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Amplify 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 Amplify 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 Amplify International Enhanced, you can compare the effects of market volatilities on UBS ETRACS and Amplify 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 Amplify International. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Amplify International.
Diversification Opportunities for UBS ETRACS and Amplify International
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Amplify is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Amplify International Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Amplify International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify International has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Amplify International go up and down completely randomly.
Pair Corralation between UBS ETRACS and Amplify International
Given the investment horizon of 90 days UBS ETRACS is expected to generate 6.18 times more return on investment than Amplify International. However, UBS ETRACS is 6.18 times more volatile than Amplify International Enhanced. It trades about 0.03 of its potential returns per unit of risk. Amplify International Enhanced is currently generating about 0.12 per unit of risk. If you would invest 1,923 in UBS ETRACS on November 3, 2024 and sell it today you would earn a total of 34.80 from holding UBS ETRACS or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. Amplify International Enhanced
Performance |
| Timeline |
| UBS ETRACS |
| Amplify International |
UBS ETRACS and Amplify International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Amplify International
The main advantage of trading using opposite UBS ETRACS and Amplify International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Amplify 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 Amplify International will offset losses from the drop in Amplify International's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. American Beacon Select | UBS ETRACS vs. First Trust Indxx | UBS ETRACS vs. Direxion Daily SP |
| Amplify International vs. Amplify ETF Trust | Amplify International vs. Amplify CWP Enhanced | Amplify International vs. Schwab International Dividend | Amplify International 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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