Correlation Between UBS ETRACS and Innovator Power

Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Innovator Power 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 Power 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 Power Buffer, you can compare the effects of market volatilities on UBS ETRACS and Innovator Power 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 Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Innovator Power.

Diversification Opportunities for UBS ETRACS and Innovator Power

-0.59

Correlation Coefficient

UBS ETRACS  Innovator Power

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 Power Buffer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Power Buffer 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 Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Power Buffer has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Innovator Power go up and down completely randomly.

Pair Corralation between UBS ETRACS and Innovator Power

Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Innovator Power. In addition to that, UBS ETRACS is 9.15 times more volatile than Innovator Power Buffer. It trades about -0.01 of its total potential returns per unit of risk. Innovator Power Buffer is currently generating about 0.12 per unit of volatility. If you would invest  2,756  in Innovator Power Buffer on September 12, 2024 and sell it today you would earn a total of  473.00  from holding Innovator Power Buffer or generate 17.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.72%
Values	Daily Returns

UBS ETRACS   vs.  Innovator Power Buffer

UBS ETRACS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UBS ETRACS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Innovator Power Buffer

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Power Buffer are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Innovator Power is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with UBS ETRACS and Innovator Power

The main advantage of trading using opposite UBS ETRACS and Innovator Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Innovator Power 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 Power will offset losses from the drop in Innovator Power's long position.

The idea behind UBS ETRACS and Innovator Power Buffer pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.