Correlation Between Themes China and Innovator Small
Can any of the company-specific risk be diversified away by investing in both Themes China and Innovator Small 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 Themes China and Innovator Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Themes China Generative and Innovator Small Cap, you can compare the effects of market volatilities on Themes China and Innovator Small 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 Themes China with a short position of Innovator Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Themes China and Innovator Small.
Diversification Opportunities for Themes China and Innovator Small
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Themes and Innovator is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Themes China Generative and Innovator Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Small Cap and Themes China 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 Themes China Generative are associated (or correlated) with Innovator Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Small Cap has no effect on the direction of Themes China i.e., Themes China and Innovator Small go up and down completely randomly.
Pair Corralation between Themes China and Innovator Small
Given the investment horizon of 90 days Themes China Generative is expected to generate 5.56 times more return on investment than Innovator Small. However, Themes China is 5.56 times more volatile than Innovator Small Cap. It trades about 0.15 of its potential returns per unit of risk. Innovator Small Cap is currently generating about 0.14 per unit of risk. If you would invest 2,621 in Themes China Generative on July 20, 2025 and sell it today you would earn a total of 679.00 from holding Themes China Generative or generate 25.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Themes China Generative vs. Innovator Small Cap
Performance |
| Timeline |
| Themes China Generative |
| Innovator Small Cap |
Themes China and Innovator Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Themes China and Innovator Small
The main advantage of trading using opposite Themes China and Innovator Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Themes China position performs unexpectedly, Innovator Small 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 Small will offset losses from the drop in Innovator Small's long position.| Themes China vs. iShares Dividend and | Themes China vs. Martin Currie Sustainable | Themes China vs. AdvisorShares Gerber Kawasaki | Themes China vs. Roundhill Ball Metaverse |
| Innovator Small vs. Dimensional ETF Trust | Innovator Small vs. ProShares Trust | Innovator Small vs. Vanguard Small Cap Index | Innovator Small vs. First Trust Multi Manager |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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