Correlation Between Innovator and STF Tactical

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

By analyzing existing cross correlation between Innovator SP 500 and STF Tactical Growth, you can compare the effects of market volatilities on Innovator and STF Tactical 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 with a short position of STF Tactical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and STF Tactical.

Diversification Opportunities for Innovator and STF Tactical

0.96

Correlation Coefficient

Innovator  STF Tactical

Almost no diversification

The 3 months correlation between Innovator and STF is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and STF Tactical Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STF Tactical Growth and Innovator 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 SP 500 are associated (or correlated) with STF Tactical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STF Tactical Growth has no effect on the direction of Innovator i.e., Innovator and STF Tactical go up and down completely randomly.

Pair Corralation between Innovator and STF Tactical

Given the investment horizon of 90 days Innovator is expected to generate 4.12 times less return on investment than STF Tactical. But when comparing it to its historical volatility, Innovator SP 500 is 2.3 times less risky than STF Tactical. It trades about 0.13 of its potential returns per unit of risk. STF Tactical Growth is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,922  in STF Tactical Growth on August 1, 2025 and sell it today you would earn a total of  233.00  from holding STF Tactical Growth or generate 5.94% return on investment over 90 days.

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

Innovator SP 500  vs.  STF Tactical Growth

Innovator SP 500

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator SP 500 are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Innovator may actually be approaching a critical reversion point that can send shares even higher in November 2025.

STF Tactical Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in STF Tactical Growth are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, STF Tactical reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Innovator and STF Tactical

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

The idea behind Innovator SP 500 and STF Tactical Growth 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.