Correlation Between GraniteShares ETF and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both GraniteShares ETF 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 GraniteShares ETF and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares ETF Trust and Innovator ETFs Trust, you can compare the effects of market volatilities on GraniteShares ETF 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 GraniteShares ETF with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares ETF and Innovator ETFs.
Diversification Opportunities for GraniteShares ETF and Innovator ETFs
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GraniteShares and Innovator is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares ETF 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 GraniteShares ETF 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 GraniteShares ETF 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 GraniteShares ETF i.e., GraniteShares ETF and Innovator ETFs go up and down completely randomly.
Pair Corralation between GraniteShares ETF and Innovator ETFs
Given the investment horizon of 90 days GraniteShares ETF Trust is expected to generate 22.88 times more return on investment than Innovator ETFs. However, GraniteShares ETF is 22.88 times more volatile than Innovator ETFs Trust. It trades about 0.09 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.13 per unit of risk. If you would invest 611.00 in GraniteShares ETF Trust on August 27, 2024 and sell it today you would earn a total of 5,123 from holding GraniteShares ETF Trust or generate 838.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.23% |
| Values | Daily Returns |
GraniteShares ETF Trust vs. Innovator ETFs Trust
Performance |
| Timeline |
| GraniteShares ETF Trust |
| Innovator ETFs Trust |
GraniteShares ETF and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares ETF and Innovator ETFs
The main advantage of trading using opposite GraniteShares ETF and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares ETF 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.| GraniteShares ETF vs. Direxion Daily SP | GraniteShares ETF vs. Direxion Daily Semiconductor | GraniteShares ETF vs. Direxion Daily Semiconductor |
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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