Correlation Between Innovator Capital and IndexIQ Active

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

Diversification Opportunities for Innovator Capital and IndexIQ Active

0.0

Correlation Coefficient

Innovator Capital  IndexIQ Active

Pay attention - limited upside

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

Pair Corralation between Innovator Capital and IndexIQ Active

If you would invest  2,571  in IndexIQ Active ETF on December 2, 2024 and sell it today you would earn a total of  54.00  from holding IndexIQ Active ETF or generate 2.1% 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.  IndexIQ Active ETF

Innovator Capital

Risk-Adjusted Performance

Very Weak

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

IndexIQ Active ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IndexIQ Active ETF are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, IndexIQ Active 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 Capital and IndexIQ Active

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

The idea behind Innovator Capital Management and IndexIQ Active ETF 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.