Correlation Between UBS ETRACS and Innovator Equity
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Innovator Equity 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 Equity 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 Equity Accelerated, you can compare the effects of market volatilities on UBS ETRACS and Innovator Equity 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 Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Innovator Equity.
Diversification Opportunities for UBS ETRACS and Innovator Equity
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UBS and Innovator is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Innovator Equity Accelerated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Equity Acc 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Equity Acc has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Innovator Equity go up and down completely randomly.
Pair Corralation between UBS ETRACS and Innovator Equity
Given the investment horizon of 90 days UBS ETRACS is expected to generate 21.29 times more return on investment than Innovator Equity. However, UBS ETRACS is 21.29 times more volatile than Innovator Equity Accelerated. It trades about 0.32 of its potential returns per unit of risk. Innovator Equity Accelerated is currently generating about 0.29 per unit of risk. If you would invest 1,593 in UBS ETRACS on September 15, 2024 and sell it today you would earn a total of 346.00 from holding UBS ETRACS or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UBS ETRACS vs. Innovator Equity Accelerated
Performance |
| Timeline |
| UBS ETRACS |
| Innovator Equity Acc |
UBS ETRACS and Innovator Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Innovator Equity
The main advantage of trading using opposite UBS ETRACS and Innovator Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Innovator Equity 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 Equity will offset losses from the drop in Innovator Equity's long position.| UBS ETRACS vs. ProShares Ultra Silver | UBS ETRACS vs. DB Gold Double | UBS ETRACS vs. ProShares UltraShort Euro |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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