Correlation Between Global X and Innovator ETFs

Can any of the company-specific risk be diversified away by investing in both Global X and Innovator ETFs 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 Global X and Innovator ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global X Blockchain and Innovator ETFs Trust, you can compare the effects of market volatilities on Global X and Innovator ETFs 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 Global X with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Innovator ETFs.

Diversification Opportunities for Global X and Innovator ETFs

0.9

Correlation Coefficient

Global X  Innovator ETFs

Almost no diversification

The 3 months correlation between Global and Innovator is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Global X Blockchain and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust and Global X 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 Global X Blockchain are associated (or correlated) with Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of Global X i.e., Global X and Innovator ETFs go up and down completely randomly.

Pair Corralation between Global X and Innovator ETFs

Given the investment horizon of 90 days Global X Blockchain is expected to generate 4.44 times more return on investment than Innovator ETFs. However, Global X is 4.44 times more volatile than Innovator ETFs Trust. It trades about 0.11 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.14 per unit of risk. If you would invest  4,775  in Global X Blockchain on October 6, 2024 and sell it today you would earn a total of  1,082  from holding Global X Blockchain or generate 22.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Global X Blockchain  vs.  Innovator ETFs Trust

Global X Blockchain

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Blockchain are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Global X demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Innovator ETFs Trust

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Innovator ETFs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Global X and Innovator ETFs

The main advantage of trading using opposite Global X and Innovator ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Innovator ETFs 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 Innovator ETFs will offset losses from the drop in Innovator ETFs' long position.

The idea behind Global X Blockchain and Innovator ETFs Trust 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.