Correlation Between Innovator and AllianzIM Large
Can any of the company-specific risk be diversified away by investing in both Innovator and AllianzIM Large 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 AllianzIM Large 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 AllianzIM Large Cap, you can compare the effects of market volatilities on Innovator and AllianzIM Large 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 AllianzIM Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator and AllianzIM Large.
Diversification Opportunities for Innovator and AllianzIM Large
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Innovator and AllianzIM is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Innovator SP 500 and AllianzIM Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianzIM Large Cap 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 AllianzIM Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianzIM Large Cap has no effect on the direction of Innovator i.e., Innovator and AllianzIM Large go up and down completely randomly.
Pair Corralation between Innovator and AllianzIM Large
Given the investment horizon of 90 days Innovator is expected to generate 1.78 times less return on investment than AllianzIM Large. But when comparing it to its historical volatility, Innovator SP 500 is 2.42 times less risky than AllianzIM Large. It trades about 0.3 of its potential returns per unit of risk. AllianzIM Large Cap is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 3,804 in AllianzIM Large Cap on August 31, 2024 and sell it today you would earn a total of 105.00 from holding AllianzIM Large Cap or generate 2.76% 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. AllianzIM Large Cap
Performance |
| Timeline |
| Innovator SP 500 |
| AllianzIM Large Cap |
Innovator and AllianzIM Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innovator and AllianzIM Large
The main advantage of trading using opposite Innovator and AllianzIM Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator position performs unexpectedly, AllianzIM Large 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 AllianzIM Large will offset losses from the drop in AllianzIM Large's long position.| Innovator vs. Innovator ETFs Trust | Innovator vs. First Trust Cboe | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
| AllianzIM Large vs. AllianzIM Large Cap | AllianzIM Large vs. AIM ETF Products | AllianzIM Large vs. AIM ETF Products | AllianzIM Large 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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