Correlation Between UBS ETRACS and Inspire Tactical
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Inspire Tactical 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 Inspire Tactical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS ETRACS and Inspire Tactical Balanced, you can compare the effects of market volatilities on UBS ETRACS and Inspire Tactical 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 Inspire Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Inspire Tactical.
Diversification Opportunities for UBS ETRACS and Inspire Tactical
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Inspire is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Inspire Tactical Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inspire Tactical Balanced 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 Inspire Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inspire Tactical Balanced has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Inspire Tactical go up and down completely randomly.
Pair Corralation between UBS ETRACS and Inspire Tactical
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Inspire Tactical. In addition to that, UBS ETRACS is 3.94 times more volatile than Inspire Tactical Balanced. It trades about -0.16 of its total potential returns per unit of risk. Inspire Tactical Balanced is currently generating about 0.3 per unit of volatility. If you would invest 2,680 in Inspire Tactical Balanced on September 4, 2024 and sell it today you would earn a total of 150.00 from holding Inspire Tactical Balanced or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. Inspire Tactical Balanced
Performance |
| Timeline |
| UBS ETRACS |
| Inspire Tactical Balanced |
UBS ETRACS and Inspire Tactical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Inspire Tactical
The main advantage of trading using opposite UBS ETRACS and Inspire Tactical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Inspire Tactical 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 Inspire Tactical will offset losses from the drop in Inspire Tactical's long position.| UBS ETRACS vs. ProShares UltraShort Bloomberg | UBS ETRACS vs. ProShares UltraShort Silver | UBS ETRACS vs. DB Gold Double | UBS ETRACS vs. MicroSectors Gold 3X |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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