Correlation Between Innovator ETFs and Amplify

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

Diversification Opportunities for Innovator ETFs and Amplify

-0.37

Correlation Coefficient

Innovator ETFs  Amplify

Very good diversification

The 3 months correlation between Innovator and Amplify is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Innovator ETFs Trust and Amplify in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify 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 Amplify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify has no effect on the direction of Innovator ETFs i.e., Innovator ETFs and Amplify go up and down completely randomly.

Pair Corralation between Innovator ETFs and Amplify

If you would invest  2,362  in Innovator ETFs Trust on September 5, 2024 and sell it today you would earn a total of  138.00  from holding Innovator ETFs Trust or generate 5.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Innovator ETFs Trust  vs.  Amplify

Innovator ETFs Trust

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward-looking indicators, Innovator ETFs is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Amplify

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amplify has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Amplify 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 Innovator ETFs and Amplify

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

The idea behind Innovator ETFs Trust and Amplify 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.