Correlation Between Innovator Growth and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Innovator Growth and ProShares Ultra 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 Growth and ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innovator Growth 100 Accelerated and ProShares Ultra SP500, you can compare the effects of market volatilities on Innovator Growth and ProShares Ultra 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 Growth with a short position of ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Growth and ProShares Ultra.
Diversification Opportunities for Innovator Growth and ProShares Ultra
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Innovator and ProShares is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Growth 100 Accelerat and ProShares Ultra SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra SP500 and Innovator Growth 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 Growth 100 Accelerated are associated (or correlated) with ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra SP500 has no effect on the direction of Innovator Growth i.e., Innovator Growth and ProShares Ultra go up and down completely randomly.
Pair Corralation between Innovator Growth and ProShares Ultra
Given the investment horizon of 90 days Innovator Growth is expected to generate 1.79 times less return on investment than ProShares Ultra. But when comparing it to its historical volatility, Innovator Growth 100 Accelerated is 1.76 times less risky than ProShares Ultra. It trades about 0.36 of its potential returns per unit of risk. ProShares Ultra SP500 is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 8,825 in ProShares Ultra SP500 on September 4, 2024 and sell it today you would earn a total of 1,024 from holding ProShares Ultra SP500 or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator Growth 100 Accelerat vs. ProShares Ultra SP500
Performance |
| Timeline |
| Innovator Growth 100 |
| ProShares Ultra SP500 |
Innovator Growth and ProShares Ultra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator Growth and ProShares Ultra
The main advantage of trading using opposite Innovator Growth and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Growth position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.| Innovator Growth vs. ProShares Ultra SP500 | Innovator Growth vs. ProShares Ultra QQQ | Innovator Growth vs. MicroSectors FANG Index | Innovator Growth vs. ProShares Ultra Financials |
| ProShares Ultra vs. ProShares Ultra QQQ | ProShares Ultra vs. ProShares Ultra Dow30 | ProShares Ultra vs. ProShares UltraShort SP500 | ProShares Ultra vs. ProShares Ultra Financials |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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