Correlation Between Innovator ETFs and US Global

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

Diversification Opportunities for Innovator ETFs and US Global

-0.2

Correlation Coefficient

Innovator ETFs  US Global

Good diversification

The 3 months correlation between Innovator and SEA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and US Global Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Global Sea 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 US Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Global Sea has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and US Global go up and down completely randomly.

Pair Corralation between Innovator ETFs and US Global

Given the investment horizon of 90 days Innovator ETFs Trust is expected to under-perform the US Global. But the etf apears to be less risky and, when comparing its historical volatility, Innovator ETFs Trust is 1.0 times less risky than US Global. The etf trades about -0.07 of its potential returns per unit of risk. The US Global Sea is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,295  in US Global Sea on December 28, 2024 and sell it today you would lose (43.00) from holding US Global Sea or give up 3.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Innovator ETFs Trust  vs.  US Global Sea

Innovator ETFs Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator ETFs Trust has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

US Global Sea

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Global Sea has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, US Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovator ETFs and US Global

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

The idea behind Innovator ETFs Trust and US Global Sea 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..