Correlation Between Innovator ETFs and IndexIQ
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and IndexIQ 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 IndexIQ 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 IndexIQ, you can compare the effects of market volatilities on Innovator ETFs and IndexIQ 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 IndexIQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and IndexIQ.
Diversification Opportunities for Innovator ETFs and IndexIQ
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innovator and IndexIQ is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and IndexIQ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ 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 IndexIQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and IndexIQ go up and down completely randomly.
Pair Corralation between Innovator ETFs and IndexIQ
If you would invest 2,310 in Innovator ETFs Trust on September 12, 2024 and sell it today you would earn a total of 458.00 from holding Innovator ETFs Trust or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 0.28% |
| Values | Daily Returns |
Innovator ETFs Trust vs. IndexIQ
Performance |
| Timeline |
| Innovator ETFs Trust |
| IndexIQ |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Innovator ETFs and IndexIQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and IndexIQ
The main advantage of trading using opposite Innovator ETFs and IndexIQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, IndexIQ 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 IndexIQ will offset losses from the drop in IndexIQ's long position.| Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust | Innovator ETFs vs. Innovator ETFs Trust |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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