Correlation Between Innovator ETFs and Matthews Emerging
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and Matthews Emerging 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 Matthews Emerging 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 Matthews Emerging Markets, you can compare the effects of market volatilities on Innovator ETFs and Matthews Emerging 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 Matthews Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Matthews Emerging.
Diversification Opportunities for Innovator ETFs and Matthews Emerging
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and Matthews is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Matthews Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Matthews Emerging Markets 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 Matthews Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Matthews Emerging Markets has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Matthews Emerging go up and down completely randomly.
Pair Corralation between Innovator ETFs and Matthews Emerging
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.5 times more return on investment than Matthews Emerging. However, Innovator ETFs Trust is 1.99 times less risky than Matthews Emerging. It trades about 0.09 of its potential returns per unit of risk. Matthews Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 2,501 in Innovator ETFs Trust on August 31, 2024 and sell it today you would earn a total of 102.00 from holding Innovator ETFs Trust or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Matthews Emerging Markets
Performance |
| Timeline |
| Innovator ETFs Trust |
| Matthews Emerging Markets |
Innovator ETFs and Matthews Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Matthews Emerging
The main advantage of trading using opposite Innovator ETFs and Matthews Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, Matthews Emerging 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 Matthews Emerging will offset losses from the drop in Matthews Emerging's long position.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator MSCI Emerging | Innovator ETFs vs. Innovator Russell 2000 | Innovator ETFs vs. Innovator MSCI Emerging |
| Matthews Emerging vs. Xtrackers MSCI Emerging | Matthews Emerging vs. FlexShares Morningstar Emerging | Matthews Emerging vs. Invesco SP Emerging | Matthews Emerging vs. First Trust Emerging |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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