Correlation Between Innovator ETFs and Goldman Sachs

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

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

Diversification Opportunities for Innovator ETFs and Goldman Sachs

1.0

Correlation Coefficient

Innovator ETFs  Goldman Sachs

No risk reduction

The 3 months correlation between Innovator and Goldman is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Goldman Sachs SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs SP and Innovator ETFs 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 ETFs Trust are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs SP has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Goldman Sachs go up and down completely randomly.

Pair Corralation between Innovator ETFs and Goldman Sachs

Given the investment horizon of 90 days Innovator ETFs is expected to generate 1.88 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Innovator ETFs Trust is 1.62 times less risky than Goldman Sachs. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs SP is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  3,579  in Goldman Sachs SP on October 4, 2024 and sell it today you would earn a total of  1,366  from holding Goldman Sachs SP or generate 38.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	60.2%
Values	Daily Returns

Innovator ETFs Trust  vs.  Goldman Sachs SP

Innovator ETFs Trust

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Innovator ETFs is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Goldman Sachs SP

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs SP are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovator ETFs and Goldman Sachs

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

The idea behind Innovator ETFs Trust and Goldman Sachs SP 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.