Correlation Between Innovator ETFs and Pacer Swan
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and Pacer Swan 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 Pacer Swan 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 Pacer Swan SOS, you can compare the effects of market volatilities on Innovator ETFs and Pacer Swan 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 Pacer Swan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Pacer Swan.
Diversification Opportunities for Innovator ETFs and Pacer Swan
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innovator and Pacer is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Pacer Swan SOS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Swan SOS 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 Pacer Swan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Swan SOS has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Pacer Swan go up and down completely randomly.
Pair Corralation between Innovator ETFs and Pacer Swan
Given the investment horizon of 90 days Innovator ETFs Trust is expected to under-perform the Pacer Swan. In addition to that, Innovator ETFs is 1.25 times more volatile than Pacer Swan SOS. It trades about -0.03 of its total potential returns per unit of risk. Pacer Swan SOS is currently generating about 0.36 per unit of volatility. If you would invest 2,614 in Pacer Swan SOS on September 4, 2024 and sell it today you would earn a total of 88.00 from holding Pacer Swan SOS or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Pacer Swan SOS
Performance |
| Timeline |
| Innovator ETFs Trust |
| Pacer Swan SOS |
Innovator ETFs and Pacer Swan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Pacer Swan
The main advantage of trading using opposite Innovator ETFs and Pacer Swan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, Pacer Swan 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 Pacer Swan will offset losses from the drop in Pacer Swan's long position.| Innovator ETFs vs. First Trust Cboe | Innovator ETFs vs. Innovator SP 500 | Innovator ETFs 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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