Correlation Between IPath Series and Innovator MSCI
Can any of the company-specific risk be diversified away by investing in both IPath Series and Innovator MSCI 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 IPath Series and Innovator MSCI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iPath Series B and Innovator MSCI Emerging, you can compare the effects of market volatilities on IPath Series and Innovator MSCI 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 IPath Series with a short position of Innovator MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPath Series and Innovator MSCI.
Diversification Opportunities for IPath Series and Innovator MSCI
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between IPath and Innovator is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding iPath Series B and Innovator MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator MSCI Emerging and IPath Series 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 iPath Series B are associated (or correlated) with Innovator MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator MSCI Emerging has no effect on the direction of IPath Series i.e., IPath Series and Innovator MSCI go up and down completely randomly.
Pair Corralation between IPath Series and Innovator MSCI
Considering the 90-day investment horizon iPath Series B is expected to generate 7.66 times more return on investment than Innovator MSCI. However, IPath Series is 7.66 times more volatile than Innovator MSCI Emerging. It trades about 0.06 of its potential returns per unit of risk. Innovator MSCI Emerging is currently generating about 0.03 per unit of risk. If you would invest 4,810 in iPath Series B on March 21, 2025 and sell it today you would earn a total of 612.00 from holding iPath Series B or generate 12.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iPath Series B vs. Innovator MSCI Emerging
Performance |
| Timeline |
| iPath Series B |
| Innovator MSCI Emerging |
IPath Series and Innovator MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IPath Series and Innovator MSCI
The main advantage of trading using opposite IPath Series and Innovator MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPath Series position performs unexpectedly, Innovator MSCI 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 MSCI will offset losses from the drop in Innovator MSCI's long position.| IPath Series vs. ProShares Ultra VIX | IPath Series vs. ProShares Short VIX | IPath Series vs. ProShares UltraPro Short | IPath Series vs. iShares 20 Year |
| Innovator MSCI vs. Innovator MSCI EAFE | Innovator MSCI vs. Innovator Russell 2000 | Innovator MSCI vs. Innovator Russell 2000 | Innovator MSCI vs. Innovator Nasdaq 100 Power |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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