Correlation Between WisdomTree Inflation and Innovator ETFs
Can any of the company-specific risk be diversified away by investing in both WisdomTree Inflation 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 WisdomTree Inflation and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Inflation Plus and Innovator ETFs Trust, you can compare the effects of market volatilities on WisdomTree Inflation 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 WisdomTree Inflation with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Inflation and Innovator ETFs.
Diversification Opportunities for WisdomTree Inflation and Innovator ETFs
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between WisdomTree and Innovator is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Inflation Plus 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 WisdomTree Inflation 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 WisdomTree Inflation Plus 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 WisdomTree Inflation i.e., WisdomTree Inflation and Innovator ETFs go up and down completely randomly.
Pair Corralation between WisdomTree Inflation and Innovator ETFs
Given the investment horizon of 90 days WisdomTree Inflation Plus is expected to generate 0.68 times more return on investment than Innovator ETFs. However, WisdomTree Inflation Plus is 1.47 times less risky than Innovator ETFs. It trades about 0.18 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.02 per unit of risk. If you would invest 2,949 in WisdomTree Inflation Plus on September 26, 2025 and sell it today you would earn a total of 437.00 from holding WisdomTree Inflation Plus or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 51.2% |
| Values | Daily Returns |
WisdomTree Inflation Plus vs. Innovator ETFs Trust
Performance |
| Timeline |
| WisdomTree Inflation Plus |
| Innovator ETFs Trust |
WisdomTree Inflation and Innovator ETFs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Inflation and Innovator ETFs
The main advantage of trading using opposite WisdomTree Inflation and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Inflation 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.| WisdomTree Inflation vs. WisdomTree MidCap Quality | WisdomTree Inflation vs. Litman Gregory Funds | WisdomTree Inflation vs. Tidal Trust II | WisdomTree Inflation vs. Tidal Trust II |
| Innovator ETFs vs. YieldMax Target 12 | Innovator ETFs vs. Tidal Trust II | Innovator ETFs vs. WisdomTree Global Defense | Innovator ETFs vs. Hotchkis Wiley SMID |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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