Correlation Between Innovator Equity and MicroSectors FANG

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

By analyzing existing cross correlation between Innovator Equity Accelerated and MicroSectors FANG ETN, you can compare the effects of market volatilities on Innovator Equity and MicroSectors FANG 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 Equity with a short position of MicroSectors FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Equity and MicroSectors FANG.

Diversification Opportunities for Innovator Equity and MicroSectors FANG

0.87

Correlation Coefficient

Innovator Equity  MicroSectors FANG

Very poor diversification

The 3 months correlation between Innovator and MicroSectors is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Equity Accelerated and MicroSectors FANG ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG ETN and Innovator Equity 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 Equity Accelerated are associated (or correlated) with MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG ETN has no effect on the direction of Innovator Equity i.e., Innovator Equity and MicroSectors FANG go up and down completely randomly.

Pair Corralation between Innovator Equity and MicroSectors FANG

Given the investment horizon of 90 days Innovator Equity is expected to generate 3.72 times less return on investment than MicroSectors FANG. But when comparing it to its historical volatility, Innovator Equity Accelerated is 4.65 times less risky than MicroSectors FANG. It trades about 0.11 of its potential returns per unit of risk. MicroSectors FANG ETN is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  6,574  in MicroSectors FANG ETN on August 26, 2025 and sell it today you would earn a total of  476.00  from holding MicroSectors FANG ETN or generate 7.24% return on investment over 90 days.

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

Innovator Equity Accelerated  vs.  MicroSectors FANG ETN

Innovator Equity Acc

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Equity Accelerated are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Innovator Equity is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

MicroSectors FANG ETN

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MicroSectors FANG ETN are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, MicroSectors FANG may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Innovator Equity and MicroSectors FANG

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

The idea behind Innovator Equity Accelerated and MicroSectors FANG ETN 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.