Correlation Between Innovator Small and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both Innovator Small 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 Small 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 Small Cap and Innovator ETFs Trust, you can compare the effects of market volatilities on Innovator Small 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 Small with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Small and Innovator ETFs.
Diversification Opportunities for Innovator Small and Innovator ETFs
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innovator and Innovator is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Small Cap 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 Small 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 Small Cap 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 Small i.e., Innovator Small and Innovator ETFs go up and down completely randomly.
Pair Corralation between Innovator Small and Innovator ETFs
Given the investment horizon of 90 days Innovator Small Cap is expected to generate 1.37 times more return on investment than Innovator ETFs. However, Innovator Small is 1.37 times more volatile than Innovator ETFs Trust. It trades about 0.18 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.13 per unit of risk. If you would invest 2,493 in Innovator Small Cap on September 3, 2024 and sell it today you would earn a total of 172.00 from holding Innovator Small Cap or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.44% |
| Values | Daily Returns |
Innovator Small Cap vs. Innovator ETFs Trust
Performance |
| Timeline |
| Innovator Small Cap |
| Innovator ETFs Trust |
Innovator Small and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Small and Innovator ETFs
The main advantage of trading using opposite Innovator Small and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Small 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 Small vs. Innovator ETFs Trust | Innovator Small vs. First Trust Cboe | Innovator Small vs. FT Cboe Vest | Innovator Small vs. Innovator SP 500 |
| Innovator ETFs vs. ProShares Ultra MSCI | Innovator ETFs vs. ProShares UltraShort MSCI | Innovator ETFs vs. SWP Growth Income | Innovator ETFs vs. Invesco DB Dollar |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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