Correlation Between Innovator ETFs and TrueShares Structured

Can any of the company-specific risk be diversified away by investing in both Innovator ETFs and TrueShares Structured 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 TrueShares Structured 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 TrueShares Structured Outcome, you can compare the effects of market volatilities on Innovator ETFs and TrueShares Structured 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 TrueShares Structured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator ETFs and TrueShares Structured.

Diversification Opportunities for Innovator ETFs and TrueShares Structured

-0.43

Correlation Coefficient

Innovator ETFs  TrueShares Structured

Very good diversification

The 3 months correlation between Innovator and TrueShares is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and TrueShares Structured Outcome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueShares Structured 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 TrueShares Structured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueShares Structured has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and TrueShares Structured go up and down completely randomly.

Pair Corralation between Innovator ETFs and TrueShares Structured

Given the investment horizon of 90 days Innovator ETFs Trust is expected to generate 0.67 times more return on investment than TrueShares Structured. However, Innovator ETFs Trust is 1.5 times less risky than TrueShares Structured. It trades about 0.18 of its potential returns per unit of risk. TrueShares Structured Outcome is currently generating about -0.08 per unit of risk. If you would invest  2,866  in Innovator ETFs Trust on December 30, 2024 and sell it today you would earn a total of  164.00  from holding Innovator ETFs Trust or generate 5.72% return on investment over 90 days.

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

Innovator ETFs Trust  vs.  TrueShares Structured Outcome

Innovator ETFs Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Innovator ETFs is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

TrueShares Structured

Risk-Adjusted Performance

Very Weak

Over the last 90 days TrueShares Structured Outcome has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TrueShares Structured is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovator ETFs and TrueShares Structured

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

The idea behind Innovator ETFs Trust and TrueShares Structured Outcome 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.