Correlation Between UBS ETRACS and Innovator Premium
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Innovator Premium 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 Innovator Premium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and Innovator Premium Income, you can compare the effects of market volatilities on UBS ETRACS and Innovator Premium 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 Innovator Premium. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Innovator Premium.
Diversification Opportunities for UBS ETRACS and Innovator Premium
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Innovator is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Innovator Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Premium Income 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 Innovator Premium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Premium Income has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Innovator Premium go up and down completely randomly.
Pair Corralation between UBS ETRACS and Innovator Premium
Given the investment horizon of 90 days UBS ETRACS is expected to generate 30.41 times more return on investment than Innovator Premium. However, UBS ETRACS is 30.41 times more volatile than Innovator Premium Income. It trades about 0.19 of its potential returns per unit of risk. Innovator Premium Income is currently generating about 0.16 per unit of risk. If you would invest 1,650 in UBS ETRACS on September 12, 2024 and sell it today you would earn a total of 224.00 from holding UBS ETRACS or generate 13.58% 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. Innovator Premium Income
Performance |
| Timeline |
| UBS ETRACS |
| Innovator Premium Income |
UBS ETRACS and Innovator Premium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Innovator Premium
The main advantage of trading using opposite UBS ETRACS and Innovator Premium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Innovator Premium 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 Innovator Premium will offset losses from the drop in Innovator Premium's long position.| UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Direxion Daily SP | UBS ETRACS vs. EA Series Trust | UBS ETRACS vs. Global X MLP |
| Innovator Premium vs. FT Vest Equity | Innovator Premium vs. Northern Lights | Innovator Premium vs. Dimensional International High | Innovator Premium vs. JPMorgan Fundamental Data |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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