Correlation Between Tidal Trust and Innovator Growth

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

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

Diversification Opportunities for Tidal Trust and Innovator Growth

-0.25

Correlation Coefficient

Tidal Trust  Innovator Growth

Very good diversification

The 3 months correlation between Tidal and Innovator is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Tidal Trust II and Innovator Growth 100 Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Growth 100 and Tidal Trust 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 Tidal Trust II are associated (or correlated) with Innovator Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Growth 100 has no effect on the direction of Tidal Trust i.e., Tidal Trust and Innovator Growth go up and down completely randomly.

Pair Corralation between Tidal Trust and Innovator Growth

Given the investment horizon of 90 days Tidal Trust II is expected to under-perform the Innovator Growth. In addition to that, Tidal Trust is 3.56 times more volatile than Innovator Growth 100 Power. It trades about -0.02 of its total potential returns per unit of risk. Innovator Growth 100 Power is currently generating about 0.12 per unit of volatility. If you would invest  4,951  in Innovator Growth 100 Power on September 1, 2024 and sell it today you would earn a total of  170.00  from holding Innovator Growth 100 Power or generate 3.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Tidal Trust II  vs.  Innovator Growth 100 Power

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 rather sound basic indicators, Tidal Trust is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Innovator Growth 100

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Growth 100 Power are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Innovator Growth is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Tidal Trust and Innovator Growth

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

The idea behind Tidal Trust II and Innovator Growth 100 Power 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.