Correlation Between Innovator Equity and GraniteShares

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Can any of the company-specific risk be diversified away by investing in both Innovator Equity 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 Equity and GraniteShares 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 GraniteShares 1x Short, you can compare the effects of market volatilities on Innovator Equity 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 Equity with a short position of GraniteShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Equity and GraniteShares.

Diversification Opportunities for Innovator Equity and GraniteShares

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Innovator and GraniteShares is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Equity Accelerated 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 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 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 Equity i.e., Innovator Equity and GraniteShares go up and down completely randomly.

Pair Corralation between Innovator Equity and GraniteShares

Given the investment horizon of 90 days Innovator Equity Accelerated is expected to generate 0.08 times more return on investment than GraniteShares. However, Innovator Equity Accelerated is 13.16 times less risky than GraniteShares. It trades about 0.12 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  2,767  in Innovator Equity Accelerated on August 31, 2024 and sell it today you would earn a total of  701.00  from holding Innovator Equity Accelerated or generate 25.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy16.84%
ValuesDaily Returns

Innovator Equity Accelerated  vs.  GraniteShares 1x Short

 Performance 
       Timeline  
Innovator Equity Acc 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Equity Accelerated are ranked lower than 17 (%) 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.
GraniteShares 1x Short 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days GraniteShares 1x Short has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Etf's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Innovator Equity and GraniteShares Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Innovator Equity and GraniteShares

The main advantage of trading using opposite Innovator Equity and GraniteShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Equity 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.
The idea behind Innovator Equity Accelerated and GraniteShares 1x Short 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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