Correlation Between Innovator ETFs and ProShares UltraPro
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and ProShares UltraPro 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 ProShares UltraPro 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 ProShares UltraPro Short, you can compare the effects of market volatilities on Innovator ETFs and ProShares UltraPro 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 ProShares UltraPro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and ProShares UltraPro.
Diversification Opportunities for Innovator ETFs and ProShares UltraPro
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innovator and ProShares is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and ProShares UltraPro Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraPro Short 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 ProShares UltraPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraPro Short has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and ProShares UltraPro go up and down completely randomly.
Pair Corralation between Innovator ETFs and ProShares UltraPro
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.09 times more return on investment than ProShares UltraPro. However, Innovator ETFs Trust is 11.29 times less risky than ProShares UltraPro. It trades about 0.2 of its potential returns per unit of risk. ProShares UltraPro Short is currently generating about -0.26 per unit of risk. If you would invest 2,466 in Innovator ETFs Trust on August 30, 2024 and sell it today you would earn a total of 28.00 from holding Innovator ETFs Trust or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. ProShares UltraPro Short
Performance |
| Timeline |
| Innovator ETFs Trust |
| ProShares UltraPro Short |
Innovator ETFs and ProShares UltraPro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and ProShares UltraPro
The main advantage of trading using opposite Innovator ETFs and ProShares UltraPro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, ProShares UltraPro 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 ProShares UltraPro will offset losses from the drop in ProShares UltraPro's long position.| Innovator ETFs vs. Innovator Growth Accelerated | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust |
| ProShares UltraPro vs. ProShares UltraPro Dow30 | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short | ProShares UltraPro vs. ProShares UltraPro Short |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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