Correlation Between VIIX and Innovator MSCI

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

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

Diversification Opportunities for VIIX and Innovator MSCI

0.0

Correlation Coefficient

VIIX  Innovator MSCI

Pay attention - limited upside

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

Pair Corralation between VIIX and Innovator MSCI

If you would invest  2,682  in Innovator MSCI EAFE on October 27, 2024 and sell it today you would earn a total of  38.00  from holding Innovator MSCI EAFE or generate 1.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

VIIX  vs.  Innovator MSCI EAFE

VIIX

Risk-Adjusted Performance

0 of 100

Very Weak

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

Innovator MSCI EAFE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with VIIX and Innovator MSCI

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

The idea behind VIIX and Innovator MSCI EAFE 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.