Correlation Between GraniteShares 15x and Innovator Growth

Can any of the company-specific risk be diversified away by investing in both GraniteShares 15x and Innovator Growth 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 GraniteShares 15x and Innovator Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GraniteShares 15x Long and Innovator Growth Accelerated, you can compare the effects of market volatilities on GraniteShares 15x and Innovator Growth 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 GraniteShares 15x with a short position of Innovator Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares 15x and Innovator Growth.

Diversification Opportunities for GraniteShares 15x and Innovator Growth

0.75

Correlation Coefficient

GraniteShares 15x  Innovator Growth

Poor diversification

The 3 months correlation between GraniteShares and Innovator is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 15x Long and Innovator Growth Accelerated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Growth Acc and GraniteShares 15x 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 GraniteShares 15x Long are associated (or correlated) with Innovator Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Growth Acc has no effect on the direction of GraniteShares 15x i.e., GraniteShares 15x and Innovator Growth go up and down completely randomly.

Pair Corralation between GraniteShares 15x and Innovator Growth

Considering the 90-day investment horizon GraniteShares 15x Long is expected to generate 3.39 times more return on investment than Innovator Growth. However, GraniteShares 15x is 3.39 times more volatile than Innovator Growth Accelerated. It trades about -0.02 of its potential returns per unit of risk. Innovator Growth Accelerated is currently generating about -0.08 per unit of risk. If you would invest  3,358  in GraniteShares 15x Long on December 30, 2024 and sell it today you would lose (305.00) from holding GraniteShares 15x Long or give up 9.08% of portfolio value over 90 days.

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

GraniteShares 15x Long  vs.  Innovator Growth Accelerated

GraniteShares 15x Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days GraniteShares 15x Long has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, GraniteShares 15x is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Innovator Growth Acc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator Growth Accelerated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Etf's forward-looking indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with GraniteShares 15x and Innovator Growth

The main advantage of trading using opposite GraniteShares 15x and Innovator Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 15x position performs unexpectedly, Innovator Growth 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 Growth will offset losses from the drop in Innovator Growth's long position.

The idea behind GraniteShares 15x Long and Innovator Growth Accelerated 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..