Correlation Between Innovator and Acruence Active
Can any of the company-specific risk be diversified away by investing in both Innovator and Acruence Active 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 and Acruence Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator SP 500 and Acruence Active Hedge, you can compare the effects of market volatilities on Innovator and Acruence Active 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 with a short position of Acruence Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and Acruence Active.
Diversification Opportunities for Innovator and Acruence Active
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and Acruence is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and Acruence Active Hedge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acruence Active Hedge and Innovator 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 SP 500 are associated (or correlated) with Acruence Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acruence Active Hedge has no effect on the direction of Innovator i.e., Innovator and Acruence Active go up and down completely randomly.
Pair Corralation between Innovator and Acruence Active
Given the investment horizon of 90 days Innovator is expected to generate 6.17 times less return on investment than Acruence Active. But when comparing it to its historical volatility, Innovator SP 500 is 2.24 times less risky than Acruence Active. It trades about 0.17 of its potential returns per unit of risk. Acruence Active Hedge is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 2,170 in Acruence Active Hedge on August 26, 2024 and sell it today you would earn a total of 217.00 from holding Acruence Active Hedge or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator SP 500 vs. Acruence Active Hedge
Performance |
| Timeline |
| Innovator SP 500 |
| Acruence Active Hedge |
Innovator and Acruence Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and Acruence Active
The main advantage of trading using opposite Innovator and Acruence Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator position performs unexpectedly, Acruence Active 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 Acruence Active will offset losses from the drop in Acruence Active's long position.| Innovator vs. First Trust Cboe | Innovator vs. FT Cboe Vest | Innovator vs. Innovator SP 500 | Innovator vs. FT Cboe Vest |
| Acruence Active vs. ZEGA Buy and | Acruence Active vs. Innovator Equity Accelerated | Acruence Active vs. Innovator SP 500 | Acruence Active vs. Innovator SP 500 |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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