Correlation Between UBS ETRACS and Innovator MSCI
Can any of the company-specific risk be diversified away by investing in both UBS ETRACS and Innovator MSCI 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 MSCI 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 MSCI EAFE, you can compare the effects of market volatilities on UBS ETRACS and Innovator MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS ETRACS and Innovator MSCI.
Diversification Opportunities for UBS ETRACS and Innovator MSCI
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between UBS and Innovator is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding UBS ETRACS and Innovator MSCI EAFE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator MSCI EAFE 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator MSCI EAFE has no effect on the direction of UBS ETRACS i.e., UBS ETRACS and Innovator MSCI go up and down completely randomly.
Pair Corralation between UBS ETRACS and Innovator MSCI
Given the investment horizon of 90 days UBS ETRACS is expected to under-perform the Innovator MSCI. In addition to that, UBS ETRACS is 7.36 times more volatile than Innovator MSCI EAFE. It trades about -0.45 of its total potential returns per unit of risk. Innovator MSCI EAFE is currently generating about 0.22 per unit of volatility. If you would invest 2,920 in Innovator MSCI EAFE on June 5, 2025 and sell it today you would earn a total of 42.00 from holding Innovator MSCI EAFE or generate 1.44% 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 MSCI EAFE
Performance |
| Timeline |
| UBS ETRACS |
| Innovator MSCI EAFE |
UBS ETRACS and Innovator MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UBS ETRACS and Innovator MSCI
The main advantage of trading using opposite UBS ETRACS and Innovator MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS ETRACS position performs unexpectedly, Innovator MSCI 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 MSCI will offset losses from the drop in Innovator MSCI's long position.| UBS ETRACS vs. First Trust Exchange Traded | UBS ETRACS vs. Ultimus Managers Trust | UBS ETRACS vs. Horizon Kinetics Medical | UBS ETRACS vs. Harbor Health Care |
| Innovator MSCI vs. Innovator MSCI Emerging | Innovator MSCI vs. Innovator Russell 2000 | Innovator MSCI vs. Innovator SP 500 | Innovator MSCI vs. Innovator Nasdaq 100 Power |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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