Correlation Between Innovator Growth and Tidal Trust

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

By analyzing existing cross correlation between Innovator Growth 100 Accelerated and Tidal Trust II, you can compare the effects of market volatilities on Innovator Growth and Tidal 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 Growth with a short position of Tidal Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Growth and Tidal Trust.

Diversification Opportunities for Innovator Growth and Tidal Trust

-0.83

Correlation Coefficient

Innovator Growth  Tidal Trust

Pay attention - limited upside

The 3 months correlation between Innovator and Tidal is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Growth 100 Accelerat and Tidal Trust II in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal Trust II and Innovator Growth 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 Growth 100 Accelerated are associated (or correlated) with Tidal Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal Trust II has no effect on the direction of Innovator Growth i.e., Innovator Growth and Tidal Trust go up and down completely randomly.

Pair Corralation between Innovator Growth and Tidal Trust

Given the investment horizon of 90 days Innovator Growth 100 Accelerated is expected to generate 0.31 times more return on investment than Tidal Trust. However, Innovator Growth 100 Accelerated is 3.21 times less risky than Tidal Trust. It trades about 0.12 of its potential returns per unit of risk. Tidal Trust II is currently generating about -0.06 per unit of risk. If you would invest  2,104  in Innovator Growth 100 Accelerated on October 10, 2024 and sell it today you would earn a total of  1,393  from holding Innovator Growth 100 Accelerated or generate 66.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	61.21%
Values	Daily Returns

Innovator Growth 100 Accelerat  vs.  Tidal Trust II

Innovator Growth 100

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Growth 100 Accelerated are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innovator Growth may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tidal Trust II

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal Trust II has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Etf's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the ETF investors.

Pair Trading with Innovator Growth and Tidal Trust

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

The idea behind Innovator Growth 100 Accelerated and Tidal Trust II 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.