Correlation Between Innovator ETFs and Pinnacle Sherman
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and Pinnacle Sherman 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 Pinnacle Sherman 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 Pinnacle Sherman Multi Strategy, you can compare the effects of market volatilities on Innovator ETFs and Pinnacle Sherman 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 Pinnacle Sherman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Pinnacle Sherman.
Diversification Opportunities for Innovator ETFs and Pinnacle Sherman
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innovator and Pinnacle is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Pinnacle Sherman Multi Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Sherman Multi 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 Pinnacle Sherman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Sherman Multi has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Pinnacle Sherman go up and down completely randomly.
Pair Corralation between Innovator ETFs and Pinnacle Sherman
Given the investment horizon of 90 days Innovator ETFs is expected to generate 17.53 times less return on investment than Pinnacle Sherman. But when comparing it to its historical volatility, Innovator ETFs Trust is 19.42 times less risky than Pinnacle Sherman. It trades about 0.51 of its potential returns per unit of risk. Pinnacle Sherman Multi Strategy is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 1,351 in Pinnacle Sherman Multi Strategy on September 2, 2024 and sell it today you would earn a total of 118.00 from holding Pinnacle Sherman Multi Strategy or generate 8.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Pinnacle Sherman Multi Strateg
Performance |
| Timeline |
| Innovator ETFs Trust |
| Pinnacle Sherman Multi |
Innovator ETFs and Pinnacle Sherman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Pinnacle Sherman
The main advantage of trading using opposite Innovator ETFs and Pinnacle Sherman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, Pinnacle Sherman 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 Pinnacle Sherman will offset losses from the drop in Pinnacle Sherman's long position.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. First Trust Cboe | Innovator ETFs vs. Innovator SP 500 | Innovator ETFs vs. Innovator Equity Power |
| Pinnacle Sherman vs. Energy Services Fund | Pinnacle Sherman vs. Ivy Energy Fund | Pinnacle Sherman vs. Hennessy Bp Energy | Pinnacle Sherman vs. Calvert Global Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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