Correlation Between Innovator Equity and Innovator ETFs

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Can any of the company-specific risk be diversified away by investing in both Innovator Equity 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 Innovator Equity and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Equity Accelerated and Innovator ETFs Trust, you can compare the effects of market volatilities on Innovator Equity 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 Innovator Equity with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Equity and Innovator ETFs.

Diversification Opportunities for Innovator Equity and Innovator ETFs

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Innovator and Innovator is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Equity Accelerated 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 Innovator Equity 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 Equity Accelerated 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 Innovator Equity i.e., Innovator Equity and Innovator ETFs go up and down completely randomly.

Pair Corralation between Innovator Equity and Innovator ETFs

Given the investment horizon of 90 days Innovator Equity is expected to generate 1.06 times less return on investment than Innovator ETFs. In addition to that, Innovator Equity is 1.39 times more volatile than Innovator ETFs Trust. It trades about 0.12 of its total potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.18 per unit of volatility. If you would invest  2,583  in Innovator ETFs Trust on September 12, 2024 and sell it today you would earn a total of  465.00  from holding Innovator ETFs Trust or generate 18.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Innovator Equity Accelerated  vs.  Innovator ETFs Trust

 Performance 
       Timeline  
Innovator Equity Acc 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Equity Accelerated are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Innovator Equity is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Innovator ETFs Trust 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Innovator ETFs is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Innovator Equity and Innovator ETFs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Innovator Equity and Innovator ETFs

The main advantage of trading using opposite Innovator Equity and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Equity 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.
The idea behind Innovator Equity Accelerated and Innovator ETFs Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Transaction History module to view history of all your transactions and understand their impact on performance.

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