Correlation Between Innovator ETFs and ProShares Supply
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and ProShares Supply 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 Supply 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 Supply Chain, you can compare the effects of market volatilities on Innovator ETFs and ProShares Supply 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 Supply. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and ProShares Supply.
Diversification Opportunities for Innovator ETFs and ProShares Supply
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovator and ProShares is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and ProShares Supply Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Supply Chain 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 Supply. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Supply Chain has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and ProShares Supply go up and down completely randomly.
Pair Corralation between Innovator ETFs and ProShares Supply
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.55 times more return on investment than ProShares Supply. However, Innovator ETFs Trust is 1.81 times less risky than ProShares Supply. It trades about 0.11 of its potential returns per unit of risk. ProShares Supply Chain is currently generating about 0.05 per unit of risk. If you would invest 2,723 in Innovator ETFs Trust on September 1, 2024 and sell it today you would earn a total of 196.00 from holding Innovator ETFs Trust or generate 7.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Innovator ETFs Trust vs. ProShares Supply Chain
Performance |
| Timeline |
| Innovator ETFs Trust |
| ProShares Supply Chain |
Innovator ETFs and ProShares Supply Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and ProShares Supply
The main advantage of trading using opposite Innovator ETFs and ProShares Supply positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, ProShares Supply 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 Supply will offset losses from the drop in ProShares Supply's long position.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. First Trust Cboe | Innovator ETFs vs. Innovator SP 500 | Innovator ETFs vs. Innovator Equity Power |
| ProShares Supply vs. Industrial Select Sector | ProShares Supply vs. Driven Brands Holdings | ProShares Supply vs. iShares Industrials ETF | ProShares Supply vs. iShares Transportation Average |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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