Correlation Between SWP Growth and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both SWP Growth and Innovator ETFs 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 SWP Growth and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWP Growth Income and Innovator ETFs Trust, you can compare the effects of market volatilities on SWP Growth and Innovator ETFs 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 SWP Growth with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWP Growth and Innovator ETFs.
Diversification Opportunities for SWP Growth and Innovator ETFs
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SWP and Innovator is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SWP Growth Income and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust and SWP 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 SWP Growth Income are associated (or correlated) with Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of SWP Growth i.e., SWP Growth and Innovator ETFs go up and down completely randomly.
Pair Corralation between SWP Growth and Innovator ETFs
Considering the 90-day investment horizon SWP Growth Income is expected to generate 2.49 times more return on investment than Innovator ETFs. However, SWP Growth is 2.49 times more volatile than Innovator ETFs Trust. It trades about 0.36 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.11 per unit of risk. If you would invest 2,501 in SWP Growth Income on September 2, 2024 and sell it today you would earn a total of 143.00 from holding SWP Growth Income or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWP Growth Income vs. Innovator ETFs Trust
Performance |
| Timeline |
| SWP Growth Income |
| Innovator ETFs Trust |
SWP Growth and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWP Growth and Innovator ETFs
The main advantage of trading using opposite SWP Growth and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWP Growth position performs unexpectedly, Innovator ETFs 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 Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.| SWP Growth vs. ProShares Ultra MSCI | SWP Growth vs. ProShares UltraShort MSCI | SWP Growth vs. Invesco DB Dollar | SWP Growth vs. Invesco DB Dollar |
| Innovator ETFs vs. ProShares Ultra MSCI | Innovator ETFs vs. ProShares UltraShort MSCI | Innovator ETFs vs. SWP Growth Income | Innovator ETFs vs. Invesco DB Dollar |
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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