Correlation Between Innovator Russell and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Innovator Russell 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 Russell 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 Russell 2000 and Innovator ETFs Trust, you can compare the effects of market volatilities on Innovator Russell 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 Russell with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Russell and Innovator ETFs.
Diversification Opportunities for Innovator Russell and Innovator ETFs
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innovator and Innovator is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Russell 2000 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 Russell 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 Russell 2000 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 Russell i.e., Innovator Russell and Innovator ETFs go up and down completely randomly.
Pair Corralation between Innovator Russell and Innovator ETFs
Given the investment horizon of 90 days Innovator Russell 2000 is expected to generate 1.29 times more return on investment than Innovator ETFs. However, Innovator Russell is 1.29 times more volatile than Innovator ETFs Trust. It trades about 0.24 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about -0.14 per unit of risk. If you would invest 3,045 in Innovator Russell 2000 on August 31, 2024 and sell it today you would earn a total of 113.00 from holding Innovator Russell 2000 or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Russell 2000 vs. Innovator ETFs Trust
Performance |
| Timeline |
| Innovator Russell 2000 |
| Innovator ETFs Trust |
Innovator Russell and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Russell and Innovator ETFs
The main advantage of trading using opposite Innovator Russell and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Russell 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 Russell vs. Innovator Growth 100 Power | Innovator Russell vs. Innovator Russell 2000 | Innovator Russell vs. Innovator SP 500 | Innovator Russell vs. Innovator SP 500 |
| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator MSCI Emerging | Innovator ETFs vs. Innovator Russell 2000 | Innovator ETFs vs. Innovator MSCI 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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