Correlation Between Innovator Etfs and UST Inc
Can any of the company-specific risk be diversified away by investing in both Innovator Etfs and UST Inc 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 Innovator Etfs and UST Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Etfs Trust and ProShares Ultra 7 10, you can compare the effects of market volatilities on Innovator Etfs and UST Inc 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 Innovator Etfs with a short position of UST Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Etfs and UST Inc.
Diversification Opportunities for Innovator Etfs and UST Inc
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innovator and UST is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Etfs Trust and ProShares Ultra 7 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra 7 and Innovator Etfs 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 Innovator Etfs Trust are associated (or correlated) with UST Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra 7 has no effect on the direction of Innovator Etfs i.e., Innovator Etfs and UST Inc go up and down completely randomly.
Pair Corralation between Innovator Etfs and UST Inc
Given the investment horizon of 90 days Innovator Etfs is expected to generate 6.87 times less return on investment than UST Inc. But when comparing it to its historical volatility, Innovator Etfs Trust is 8.4 times less risky than UST Inc. It trades about 0.26 of its potential returns per unit of risk. ProShares Ultra 7 10 is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 4,022 in ProShares Ultra 7 10 on November 9, 2024 and sell it today you would earn a total of 145.00 from holding ProShares Ultra 7 10 or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Etfs Trust vs. ProShares Ultra 7 10
Performance |
| Timeline |
| Innovator Etfs Trust |
| ProShares Ultra 7 |
Innovator Etfs and UST Inc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Etfs and UST Inc
The main advantage of trading using opposite Innovator Etfs and UST Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Etfs position performs unexpectedly, UST Inc 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 UST Inc will offset losses from the drop in UST Inc's long position.| Innovator Etfs vs. Innovator Premium Income | Innovator Etfs vs. Innovator Premium Income | Innovator Etfs vs. Innovator Premium Income |
| UST Inc vs. ProShares Ultra 20 | UST Inc vs. Universal | UST Inc vs. Direxion Daily 7 10 | UST Inc vs. ProShares UltraShort 7 10 |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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