Correlation Between VanEck Green and Innovator Capital
Can any of the company-specific risk be diversified away by investing in both VanEck Green and Innovator Capital 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 VanEck Green and Innovator Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck Green Bond and Innovator Capital Management, you can compare the effects of market volatilities on VanEck Green and Innovator Capital 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 VanEck Green with a short position of Innovator Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck Green and Innovator Capital.
Diversification Opportunities for VanEck Green and Innovator Capital
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between VanEck and Innovator is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding VanEck Green Bond and Innovator Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Capital and VanEck Green 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 VanEck Green Bond are associated (or correlated) with Innovator Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Capital has no effect on the direction of VanEck Green i.e., VanEck Green and Innovator Capital go up and down completely randomly.
Pair Corralation between VanEck Green and Innovator Capital
Given the investment horizon of 90 days VanEck Green is expected to generate 2.3 times less return on investment than Innovator Capital. In addition to that, VanEck Green is 2.3 times more volatile than Innovator Capital Management. It trades about 0.08 of its total potential returns per unit of risk. Innovator Capital Management is currently generating about 0.44 per unit of volatility. If you would invest 3,132 in Innovator Capital Management on August 31, 2024 and sell it today you would earn a total of 55.00 from holding Innovator Capital Management or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 8.31% |
| Values | Daily Returns |
VanEck Green Bond vs. Innovator Capital Management
Performance |
| Timeline |
| VanEck Green Bond |
| Innovator Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
VanEck Green and Innovator Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck Green and Innovator Capital
The main advantage of trading using opposite VanEck Green and Innovator Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck Green position performs unexpectedly, Innovator Capital 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 Capital will offset losses from the drop in Innovator Capital's long position.| VanEck Green vs. iShares USD Green | VanEck Green vs. First Trust California | VanEck Green vs. Great Southern Bancorp | VanEck Green vs. VanEck China Bond |
| Innovator Capital vs. First Trust Exchange Traded | Innovator Capital vs. FT Cboe Vest | Innovator Capital vs. FT Cboe Vest |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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