Correlation Between Innovator Loup and Global X

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

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

Diversification Opportunities for Innovator Loup and Global X

0.81

Correlation Coefficient

Innovator Loup  Global X

Very poor diversification

The 3 months correlation between Innovator and Global is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Loup Frontier and Global X Internet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Internet and Innovator Loup 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 Loup Frontier are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Internet has no effect on the direction of Innovator Loup i.e., Innovator Loup and Global X go up and down completely randomly.

Pair Corralation between Innovator Loup and Global X

Given the investment horizon of 90 days Innovator Loup Frontier is expected to under-perform the Global X. In addition to that, Innovator Loup is 1.93 times more volatile than Global X Internet. It trades about -0.08 of its total potential returns per unit of risk. Global X Internet is currently generating about -0.07 per unit of volatility. If you would invest  3,495  in Global X Internet on December 28, 2024 and sell it today you would lose (206.00) from holding Global X Internet or give up 5.89% of portfolio value over 90 days.

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

Innovator Loup Frontier  vs.  Global X Internet

Innovator Loup Frontier

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator Loup Frontier has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Etf's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the ETF retail investors.

Global X Internet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global X Internet has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Global X is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Innovator Loup and Global X

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

The idea behind Innovator Loup Frontier and Global X Internet 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.