Correlation Between Innovator Growth and EA Series
Can any of the company-specific risk be diversified away by investing in both Innovator Growth and EA Series 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 Growth and EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Growth 100 Accelerated and EA Series Trust, you can compare the effects of market volatilities on Innovator Growth and EA Series 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 Growth with a short position of EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Growth and EA Series.
Diversification Opportunities for Innovator Growth and EA Series
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and ECML is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Growth 100 Accelerat and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust and Innovator Growth 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 Growth 100 Accelerated are associated (or correlated) with EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Innovator Growth i.e., Innovator Growth and EA Series go up and down completely randomly.
Pair Corralation between Innovator Growth and EA Series
Given the investment horizon of 90 days Innovator Growth is expected to generate 3.21 times less return on investment than EA Series. But when comparing it to its historical volatility, Innovator Growth 100 Accelerated is 2.06 times less risky than EA Series. It trades about 0.16 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,337 in EA Series Trust on August 26, 2024 and sell it today you would earn a total of 237.00 from holding EA Series Trust or generate 7.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Growth 100 Accelerat vs. EA Series Trust
Performance |
| Timeline |
| Innovator Growth 100 |
| EA Series Trust |
Innovator Growth and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Growth and EA Series
The main advantage of trading using opposite Innovator Growth and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Growth position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.| Innovator Growth vs. FT Cboe Vest | Innovator Growth vs. Innovator SP 500 | Innovator Growth vs. FT Cboe Vest |
| EA Series vs. Freedom Day Dividend | EA Series vs. Davis Select International | EA Series vs. iShares MSCI China | EA Series vs. SmartETFs Dividend Builder |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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