Correlation Between Innovator ETFs and First Trust
Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and First Trust 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 First Trust 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 First Trust International, you can compare the effects of market volatilities on Innovator ETFs and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and First Trust.
Diversification Opportunities for Innovator ETFs and First Trust
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innovator and First is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and First Trust International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust International 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust International has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and First Trust go up and down completely randomly.
Pair Corralation between Innovator ETFs and First Trust
Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.66 times more return on investment than First Trust. However, Innovator ETFs Trust is 1.51 times less risky than First Trust. It trades about 0.13 of its potential returns per unit of risk. First Trust International is currently generating about -0.13 per unit of risk. If you would invest 2,892 in Innovator ETFs Trust on August 24, 2024 and sell it today you would earn a total of 53.00 from holding Innovator ETFs Trust or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innovator ETFs Trust vs. First Trust International
Performance |
| Timeline |
| Innovator ETFs Trust |
| First Trust International |
Innovator ETFs and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator ETFs and First Trust
The main advantage of trading using opposite Innovator ETFs and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator ETFs position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Innovator ETFs vs. First Trust Cboe | Innovator ETFs vs. FT Cboe Vest | Innovator ETFs vs. Innovator SP 500 | Innovator ETFs vs. Innovator SP 500 |
| First Trust vs. Freedom Day Dividend | First Trust vs. Davis Select International | First Trust vs. iShares MSCI China | First Trust vs. SmartETFs Dividend Builder |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |