Correlation Between Innovator Nasdaq and LHA Market
Can any of the company-specific risk be diversified away by investing in both Innovator Nasdaq and LHA Market 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 Nasdaq and LHA Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Nasdaq 100 Power and LHA Market State, you can compare the effects of market volatilities on Innovator Nasdaq and LHA Market 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 Nasdaq with a short position of LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Nasdaq and LHA Market.
Diversification Opportunities for Innovator Nasdaq and LHA Market
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innovator and LHA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Nasdaq 100 Power and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State and Innovator Nasdaq 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 Nasdaq 100 Power are associated (or correlated) with LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Innovator Nasdaq i.e., Innovator Nasdaq and LHA Market go up and down completely randomly.
Pair Corralation between Innovator Nasdaq and LHA Market
Given the investment horizon of 90 days Innovator Nasdaq 100 Power is expected to generate 1.26 times more return on investment than LHA Market. However, Innovator Nasdaq is 1.26 times more volatile than LHA Market State. It trades about 0.13 of its potential returns per unit of risk. LHA Market State is currently generating about -0.04 per unit of risk. If you would invest 3,528 in Innovator Nasdaq 100 Power on August 29, 2024 and sell it today you would earn a total of 1,469 from holding Innovator Nasdaq 100 Power or generate 41.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Nasdaq 100 Power vs. LHA Market State
Performance |
| Timeline |
| Innovator Nasdaq 100 |
| LHA Market State |
Innovator Nasdaq and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Nasdaq and LHA Market
The main advantage of trading using opposite Innovator Nasdaq and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Nasdaq position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Innovator Nasdaq vs. ABIVAX Socit Anonyme | Innovator Nasdaq vs. Pinnacle Sherman Multi Strategy | Innovator Nasdaq vs. Morningstar Unconstrained Allocation | Innovator Nasdaq vs. SPACE |
| LHA Market vs. ETF Series Solutions | LHA Market vs. Northern Lights | LHA Market vs. Innovator Nasdaq 100 Power | LHA Market vs. Tidal ETF Trust |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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