Correlation Between AllianzIM Large and Innovator ETFs

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

By analyzing existing cross correlation between AllianzIM Large Cap and Innovator ETFs Trust, you can compare the effects of market volatilities on AllianzIM Large and Innovator ETFs 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 Large with a short position of Innovator ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of AllianzIM Large and Innovator ETFs.

Diversification Opportunities for AllianzIM Large and Innovator ETFs

-0.04

Correlation Coefficient

AllianzIM Large  Innovator ETFs

Good diversification

The 3 months correlation between AllianzIM and Innovator is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding AllianzIM Large Cap and Innovator ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator ETFs Trust and AllianzIM Large 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 Large Cap are associated (or correlated) with Innovator ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator ETFs Trust has no effect on the direction of AllianzIM Large i.e., AllianzIM Large and Innovator ETFs go up and down completely randomly.

Pair Corralation between AllianzIM Large and Innovator ETFs

Given the investment horizon of 90 days AllianzIM Large Cap is expected to generate 1.25 times more return on investment than Innovator ETFs. However, AllianzIM Large is 1.25 times more volatile than Innovator ETFs Trust. It trades about 0.12 of its potential returns per unit of risk. Innovator ETFs Trust is currently generating about 0.11 per unit of risk. If you would invest  2,823  in AllianzIM Large Cap on October 11, 2024 and sell it today you would earn a total of  1,057  from holding AllianzIM Large Cap or generate 37.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.28%
Values	Daily Returns

AllianzIM Large Cap  vs.  Innovator ETFs Trust

AllianzIM Large Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AllianzIM Large Cap are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, AllianzIM Large is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Innovator ETFs Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator ETFs Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Innovator ETFs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AllianzIM Large and Innovator ETFs

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

The idea behind AllianzIM Large Cap and Innovator ETFs Trust 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.