Correlation Between Innovator Capital and AIM ETF

Can any of the company-specific risk be diversified away by investing in both Innovator Capital 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 Capital 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 Capital Management and AIM ETF Products, you can compare the effects of market volatilities on Innovator Capital 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 Capital with a short position of AIM ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innovator Capital and AIM ETF.

Diversification Opportunities for Innovator Capital and AIM ETF

0.0

Correlation Coefficient

Innovator Capital  AIM ETF

Pay attention - limited upside

The 3 months correlation between Innovator and AIM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innovator Capital Management 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 Capital 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 Capital Management 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 Capital i.e., Innovator Capital and AIM ETF go up and down completely randomly.

Pair Corralation between Innovator Capital and AIM ETF

If you would invest (100.00) in Innovator Capital Management on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Innovator Capital Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Innovator Capital Management  vs.  AIM ETF Products

Innovator Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Innovator Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward-looking indicators, Innovator Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

AIM ETF Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days AIM ETF Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, AIM ETF is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Innovator Capital and AIM ETF

The main advantage of trading using opposite Innovator Capital and AIM ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innovator Capital 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.

The idea behind Innovator Capital Management and AIM ETF Products 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.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.