Correlation Between ProShares Trust and Innovator Loup
Can any of the company-specific risk be diversified away by investing in both ProShares Trust and Innovator Loup 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 ProShares Trust and Innovator Loup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProShares Trust and Innovator Loup Frontier, you can compare the effects of market volatilities on ProShares Trust and Innovator Loup 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 ProShares Trust with a short position of Innovator Loup. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProShares Trust and Innovator Loup.
Diversification Opportunities for ProShares Trust and Innovator Loup
-0.94 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProShares and Innovator is -0.94. Overlapping area represents the amount of risk that can be diversified away by holding ProShares Trust and Innovator Loup Frontier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Loup Frontier and ProShares Trust 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 ProShares Trust are associated (or correlated) with Innovator Loup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Loup Frontier has no effect on the direction of ProShares Trust i.e., ProShares Trust and Innovator Loup go up and down completely randomly.
Pair Corralation between ProShares Trust and Innovator Loup
Given the investment horizon of 90 days ProShares Trust is expected to under-perform the Innovator Loup. In addition to that, ProShares Trust is 2.18 times more volatile than Innovator Loup Frontier. It trades about -0.1 of its total potential returns per unit of risk. Innovator Loup Frontier is currently generating about 0.06 per unit of volatility. If you would invest 4,012 in Innovator Loup Frontier on September 12, 2024 and sell it today you would earn a total of 1,468 from holding Innovator Loup Frontier or generate 36.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProShares Trust vs. Innovator Loup Frontier
Performance |
| Timeline |
| ProShares Trust |
| Innovator Loup Frontier |
ProShares Trust and Innovator Loup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProShares Trust and Innovator Loup
The main advantage of trading using opposite ProShares Trust and Innovator Loup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProShares Trust position performs unexpectedly, Innovator Loup 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 Loup will offset losses from the drop in Innovator Loup's long position.| ProShares Trust vs. ProShares Ultra Euro | ProShares Trust vs. ProShares UltraShort Yen | ProShares Trust vs. ProShares Ultra Telecommunications | ProShares Trust vs. ProShares Ultra Consumer |
| Innovator Loup vs. First Trust Nasdaq | Innovator Loup vs. SPDR FactSet Innovative | Innovator Loup vs. Defiance Quantum ETF | Innovator Loup vs. SPDR Kensho New |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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