Correlation Between Innovator ETFs and GraniteShares
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and GraniteShares 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 ETFs and GraniteShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator ETFs Trust and GraniteShares 1x Short, you can compare the effects of market volatilities on Innovator ETFs and GraniteShares 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 ETFs with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and GraniteShares.
Diversification Opportunities for Innovator ETFs and GraniteShares
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innovator and GraniteShares is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and GraniteShares 1x Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GraniteShares 1x Short and Innovator ETFs 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 ETFs Trust are associated (or correlated) with GraniteShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GraniteShares 1x Short has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and GraniteShares go up and down completely randomly.
Pair Corralation between Innovator ETFs and GraniteShares
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.07 times more return on investment than GraniteShares. However, Innovator ETFs Trust is 14.77 times less risky than GraniteShares. It trades about 0.14 of its potential returns per unit of risk. GraniteShares 1x Short is currently generating about -0.18 per unit of risk. If you would invest 2,257 in Innovator ETFs Trust on August 31, 2024 and sell it today you would earn a total of 580.00 from holding Innovator ETFs Trust or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 16.89% |
| Values | Daily Returns |
Innovator ETFs Trust vs. GraniteShares 1x Short
Performance |
| Timeline |
| Innovator ETFs Trust |
| GraniteShares 1x Short |
Innovator ETFs and GraniteShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and GraniteShares
The main advantage of trading using opposite Innovator ETFs and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, GraniteShares 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 GraniteShares will offset losses from the drop in GraniteShares' long position.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator Equity Accelerated | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust |
| GraniteShares vs. Tidal Trust II | GraniteShares vs. Tidal Trust II | GraniteShares vs. Direxion Daily META | GraniteShares vs. Direxion Daily META |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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