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 Defined, 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
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between UBS and Innovator is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Innovator Equity Defined in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Equity Defined 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 Defined 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 under-perform the Innovator Equity. In addition to that, UBS ETRACS is 25.99 times more volatile than Innovator Equity Defined. It trades about -0.01 of its total potential returns per unit of risk. Innovator Equity Defined is currently generating about 0.24 per unit of volatility. If you would invest 2,456 in Innovator Equity Defined on September 12, 2024 and sell it today you would earn a total of 58.00 from holding Innovator Equity Defined or generate 2.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 19.89% |
| Values | Daily Returns |
UBS ETRACS vs. Innovator Equity Defined
Performance |
| Timeline |
| UBS ETRACS |
| Innovator Equity Defined |
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. Ultimus Managers Trust | UBS ETRACS vs. Direxion Daily SP | UBS ETRACS vs. EA Series Trust | UBS ETRACS vs. Global X MLP |
| Innovator Equity vs. FT Vest Equity | Innovator Equity vs. Northern Lights | Innovator Equity vs. Dimensional International High | Innovator Equity 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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