Correlation Between Innovator Capital and First Trust
Can any of the company-specific risk be diversified away by investing in both Innovator Capital and First Trust 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 First Trust 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 First Trust RBA, you can compare the effects of market volatilities on Innovator Capital and First Trust 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 First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Capital and First Trust.
Diversification Opportunities for Innovator Capital and First Trust
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Innovator and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Capital Management and First Trust RBA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust RBA 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust RBA has no effect on the direction of Innovator Capital i.e., Innovator Capital and First Trust go up and down completely randomly.
Pair Corralation between Innovator Capital and First Trust
If you would invest (100.00) in Innovator Capital Management on December 5, 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. First Trust RBA
Performance |
Timeline |
Innovator Capital |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
First Trust RBA |
Innovator Capital and First Trust Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innovator Capital and First Trust
The main advantage of trading using opposite Innovator Capital and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Capital position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.Innovator Capital vs. Innovator ETFs Trust | Innovator Capital vs. Innovator Equity Accelerated | Innovator Capital vs. Innovator ETFs Trust | Innovator Capital vs. Innovator ETFs Trust |
First Trust vs. Invesco SP SmallCap | First Trust vs. First Trust NASDAQ | First Trust vs. First Trust Small | First Trust vs. First Trust Nasdaq |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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