Correlation Between AllianzIM Equity and Innovator
Can any of the company-specific risk be diversified away by investing in both AllianzIM Equity and Innovator 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 AllianzIM Equity and Innovator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AllianzIM Equity Buffer15 and Innovator SP 500, you can compare the effects of market volatilities on AllianzIM Equity and Innovator 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 AllianzIM Equity with a short position of Innovator. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianzIM Equity and Innovator.
Diversification Opportunities for AllianzIM Equity and Innovator
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AllianzIM and Innovator is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding AllianzIM Equity Buffer15 and Innovator SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator SP 500 and AllianzIM 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 AllianzIM Equity Buffer15 are associated (or correlated) with Innovator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator SP 500 has no effect on the direction of AllianzIM Equity i.e., AllianzIM Equity and Innovator go up and down completely randomly.
Pair Corralation between AllianzIM Equity and Innovator
Given the investment horizon of 90 days AllianzIM Equity Buffer15 is expected to generate 1.54 times more return on investment than Innovator. However, AllianzIM Equity is 1.54 times more volatile than Innovator SP 500. It trades about 0.3 of its potential returns per unit of risk. Innovator SP 500 is currently generating about 0.21 per unit of risk. If you would invest 2,564 in AllianzIM Equity Buffer15 on November 9, 2024 and sell it today you would earn a total of 82.00 from holding AllianzIM Equity Buffer15 or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
AllianzIM Equity Buffer15 vs. Innovator SP 500
Performance |
| Timeline |
| AllianzIM Equity Buffer15 |
| Innovator SP 500 |
AllianzIM Equity and Innovator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AllianzIM Equity and Innovator
The main advantage of trading using opposite AllianzIM Equity and Innovator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AllianzIM Equity position performs unexpectedly, Innovator 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 will offset losses from the drop in Innovator's long position.| AllianzIM Equity vs. FT Vest Equity | AllianzIM Equity vs. Northern Lights | AllianzIM Equity vs. Dimensional International High | AllianzIM Equity vs. First Trust Exchange Traded |
| Innovator vs. Innovator Equity Power | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 | Innovator vs. Innovator SP 500 |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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