Correlation Between Innovator Capital and JPMorgan BetaBuilders

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

By analyzing existing cross correlation between Innovator Capital Management and JPMorgan BetaBuilders Small, you can compare the effects of market volatilities on Innovator Capital and JPMorgan BetaBuilders 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 Capital with a short position of JPMorgan BetaBuilders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Capital and JPMorgan BetaBuilders.

Diversification Opportunities for Innovator Capital and JPMorgan BetaBuilders

0.0

Correlation Coefficient

Innovator Capital  JPMorgan BetaBuilders

Pay attention - limited upside

The 3 months correlation between Innovator and JPMorgan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Capital Management and JPMorgan BetaBuilders Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMorgan BetaBuilders and Innovator Capital 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 Capital Management are associated (or correlated) with JPMorgan BetaBuilders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMorgan BetaBuilders has no effect on the direction of Innovator Capital i.e., Innovator Capital and JPMorgan BetaBuilders go up and down completely randomly.

Pair Corralation between Innovator Capital and JPMorgan BetaBuilders

If you would invest (100.00) in Innovator Capital Management on December 21, 2024 and sell it today you would earn a total of  100.00  from holding Innovator Capital Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Innovator Capital Management  vs.  JPMorgan BetaBuilders Small

Innovator Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Innovator Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

JPMorgan BetaBuilders

Risk-Adjusted Performance

Very Weak

Over the last 90 days JPMorgan BetaBuilders Small has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

Pair Trading with Innovator Capital and JPMorgan BetaBuilders

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

The idea behind Innovator Capital Management and JPMorgan BetaBuilders Small 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.