Correlation Between AB Active and Innovator Equity

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

By analyzing existing cross correlation between AB Active ETFs, and Innovator Equity 10, you can compare the effects of market volatilities on AB Active and Innovator Equity 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 AB Active with a short position of Innovator Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB Active and Innovator Equity.

Diversification Opportunities for AB Active and Innovator Equity

0.73

Correlation Coefficient

AB Active  Innovator Equity

Poor diversification

The 3 months correlation between LRGC and Innovator is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding AB Active ETFs, and Innovator Equity 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innovator Equity and AB Active 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 AB Active ETFs, are associated (or correlated) with Innovator Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innovator Equity has no effect on the direction of AB Active i.e., AB Active and Innovator Equity go up and down completely randomly.

Pair Corralation between AB Active and Innovator Equity

Given the investment horizon of 90 days AB Active ETFs, is expected to generate 2.35 times more return on investment than Innovator Equity. However, AB Active is 2.35 times more volatile than Innovator Equity 10. It trades about 0.06 of its potential returns per unit of risk. Innovator Equity 10 is currently generating about 0.11 per unit of risk. If you would invest  7,666  in AB Active ETFs, on September 11, 2025 and sell it today you would earn a total of  190.00  from holding AB Active ETFs, or generate 2.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

AB Active ETFs,  vs.  Innovator Equity 10

AB Active ETFs,

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in AB Active ETFs, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, AB Active is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Innovator Equity

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Innovator Equity 10 are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Innovator Equity is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with AB Active and Innovator Equity

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

The idea behind AB Active ETFs, and Innovator Equity 10 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.