Correlation Between Volatility Shares and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Volatility Shares and Innovator ETFs 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 Volatility Shares and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volatility Shares Trust and Innovator ETFs Trust, you can compare the effects of market volatilities on Volatility Shares and Innovator ETFs 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 Volatility Shares with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volatility Shares and Innovator ETFs.
Diversification Opportunities for Volatility Shares and Innovator ETFs
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Volatility and Innovator is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Volatility Shares Trust and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust and Volatility Shares 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 Volatility Shares Trust are associated (or correlated) with Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of Volatility Shares i.e., Volatility Shares and Innovator ETFs go up and down completely randomly.
Pair Corralation between Volatility Shares and Innovator ETFs
Given the investment horizon of 90 days Volatility Shares is expected to generate 19.77 times less return on investment than Innovator ETFs. But when comparing it to its historical volatility, Volatility Shares Trust is 15.33 times less risky than Innovator ETFs. It trades about 0.09 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Innovator ETFs Trust on August 24, 2024 and sell it today you would earn a total of 2,427 from holding Innovator ETFs Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.8% |
| Values | Daily Returns |
Volatility Shares Trust vs. Innovator ETFs Trust
Performance |
| Timeline |
| Volatility Shares Trust |
| Innovator ETFs Trust |
Volatility Shares and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volatility Shares and Innovator ETFs
The main advantage of trading using opposite Volatility Shares and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volatility Shares position performs unexpectedly, Innovator ETFs 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 ETFs will offset losses from the drop in Innovator ETFs' long position.| Volatility Shares vs. ProShares Bitcoin Strategy | Volatility Shares vs. Bitwise 10 Crypto | Volatility Shares vs. Global X Blockchain |
| Innovator ETFs vs. Aptus Collared Income | Innovator ETFs vs. Core Alternative ETF | Innovator ETFs vs. Aptus Drawdown Managed | Innovator ETFs vs. Amplify BlackSwan Growth |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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