Correlation Between Innovator ETFs and SoFi Select
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and SoFi Select 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 SoFi Select 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 SoFi Select 500, you can compare the effects of market volatilities on Innovator ETFs and SoFi Select 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 SoFi Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and SoFi Select.
Diversification Opportunities for Innovator ETFs and SoFi Select
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innovator and SoFi is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and SoFi Select 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Select 500 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 SoFi Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Select 500 has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and SoFi Select go up and down completely randomly.
Pair Corralation between Innovator ETFs and SoFi Select
Given the investment horizon of 90 days Innovator ETFs is expected to generate 3.32 times less return on investment than SoFi Select. But when comparing it to its historical volatility, Innovator ETFs Trust is 3.85 times less risky than SoFi Select. It trades about 0.18 of its potential returns per unit of risk. SoFi Select 500 is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10,696 in SoFi Select 500 on August 26, 2024 and sell it today you would earn a total of 399.00 from holding SoFi Select 500 or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. SoFi Select 500
Performance |
| Timeline |
| Innovator ETFs Trust |
| SoFi Select 500 |
Innovator ETFs and SoFi Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and SoFi Select
The main advantage of trading using opposite Innovator ETFs and SoFi Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, SoFi Select 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 SoFi Select will offset losses from the drop in SoFi Select'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 |
| SoFi Select vs. Berry Petroleum Corp | SoFi Select vs. Comstock Resources | SoFi Select vs. SoFi Next 500 | SoFi Select vs. SM Energy Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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