Correlation Between Innovator and AIM ETF
Can any of the company-specific risk be diversified away by investing in both Innovator and AIM ETF 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 AIM ETF 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 AIM ETF Products, you can compare the effects of market volatilities on Innovator and AIM ETF 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 AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and AIM ETF.
Diversification Opportunities for Innovator and AIM ETF
Very poor diversification
The 3 months correlation between Innovator and AIM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and AIM ETF Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIM ETF Products 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 AIM ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIM ETF Products has no effect on the direction of Innovator i.e., Innovator and AIM ETF go up and down completely randomly.
Pair Corralation between Innovator and AIM ETF
Given the investment horizon of 90 days Innovator is expected to generate 1.25 times less return on investment than AIM ETF. But when comparing it to its historical volatility, Innovator SP 500 is 1.32 times less risky than AIM ETF. It trades about 0.15 of its potential returns per unit of risk. AIM ETF Products is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,802 in AIM ETF Products on September 1, 2024 and sell it today you would earn a total of 786.00 from holding AIM ETF Products or generate 28.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Innovator SP 500 vs. AIM ETF Products
Performance |
| Timeline |
| Innovator SP 500 |
| AIM ETF Products |
Innovator and AIM ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and AIM ETF
The main advantage of trading using opposite Innovator and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator position performs unexpectedly, AIM ETF 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 AIM ETF will offset losses from the drop in AIM ETF's long position.| Innovator vs. Innovator ETFs Trust | Innovator vs. First Trust Cboe | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
| AIM ETF vs. AIM ETF Products | AIM ETF vs. AIM ETF Products | AIM ETF vs. AllianzIM Large Cap | AIM ETF vs. AIM ETF Products |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |