Correlation Between Innovator ETFs and Global X
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and Global X 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 Global X 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 Global X SuperIncome, you can compare the effects of market volatilities on Innovator ETFs and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and Global X.
Diversification Opportunities for Innovator ETFs and Global X
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innovator and Global is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Global X SuperIncome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SuperIncome 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SuperIncome has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Global X go up and down completely randomly.
Pair Corralation between Innovator ETFs and Global X
Given the investment horizon of 90 days Innovator ETFs is expected to generate 2.7 times less return on investment than Global X. But when comparing it to its historical volatility, Innovator ETFs Trust is 5.4 times less risky than Global X. It trades about 0.59 of its potential returns per unit of risk. Global X SuperIncome is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 950.00 in Global X SuperIncome on September 2, 2024 and sell it today you would earn a total of 32.00 from holding Global X SuperIncome or generate 3.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. Global X SuperIncome
Performance |
| Timeline |
| Innovator ETFs Trust |
| Global X SuperIncome |
Innovator ETFs and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and Global X
The main advantage of trading using opposite Innovator ETFs and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's 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 |
| Global X vs. Innovator SP Investment | Global X vs. Nuveen Preferred and | Global X vs. First Trust Preferred | Global X vs. iShares Preferred and |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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