Correlation Between Innovator IBD and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Innovator IBD 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 Innovator IBD and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator IBD 50 and Innovator ETFs Trust, you can compare the effects of market volatilities on Innovator IBD 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 Innovator IBD with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator IBD and Innovator ETFs.
Diversification Opportunities for Innovator IBD and Innovator ETFs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innovator and Innovator is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Innovator IBD 50 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 Innovator IBD 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 IBD 50 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 Innovator IBD i.e., Innovator IBD and Innovator ETFs go up and down completely randomly.
Pair Corralation between Innovator IBD and Innovator ETFs
Given the investment horizon of 90 days Innovator IBD 50 is expected to generate 1.58 times more return on investment than Innovator ETFs. However, Innovator IBD is 1.58 times more volatile than Innovator ETFs Trust. It trades about 0.19 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.17 per unit of risk. If you would invest 2,597 in Innovator IBD 50 on August 30, 2024 and sell it today you would earn a total of 526.00 from holding Innovator IBD 50 or generate 20.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator IBD 50 vs. Innovator ETFs Trust
Performance |
| Timeline |
| Innovator IBD 50 |
| Innovator ETFs Trust |
Innovator IBD and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator IBD and Innovator ETFs
The main advantage of trading using opposite Innovator IBD and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator IBD 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.| Innovator IBD vs. Innovator ETFs Trust | Innovator IBD vs. iShares Expanded Tech Software | Innovator IBD vs. iShares MSCI USA | Innovator IBD vs. Renaissance IPO ETF |
| Innovator ETFs vs. Innovator IBD 50 | Innovator ETFs vs. Marketwise | Innovator ETFs vs. MoonLake Immunotherapeutics | Innovator ETFs vs. Streamline Health Solutions |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |