Correlation Between Innovator and Innovator Capital
Can any of the company-specific risk be diversified away by investing in both Innovator and Innovator Capital 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 Innovator Capital 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 Innovator Capital Management, you can compare the effects of market volatilities on Innovator and Innovator Capital 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 Innovator Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and Innovator Capital.
Diversification Opportunities for Innovator and Innovator Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Innovator and Innovator is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and Innovator Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Capital 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 Innovator Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Capital has no effect on the direction of Innovator i.e., Innovator and Innovator Capital go up and down completely randomly.
Pair Corralation between Innovator and Innovator Capital
If you would invest 3,492 in Innovator SP 500 on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Innovator SP 500 or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.55% |
| Values | Daily Returns |
Innovator SP 500 vs. Innovator Capital Management
Performance |
| Timeline |
| Innovator SP 500 |
| Innovator Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Innovator and Innovator Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and Innovator Capital
The main advantage of trading using opposite Innovator and Innovator Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator position performs unexpectedly, Innovator Capital 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 Capital will offset losses from the drop in Innovator Capital's long position.| Innovator vs. Innovator SP 500 | Innovator vs. Innovator Equity Ultra | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
| Innovator Capital vs. ProShares VIX Mid Term | Innovator Capital vs. ProShares VIX Short Term | Innovator Capital vs. iPath Series B | Innovator Capital vs. ProShares Short Russell2000 |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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