Correlation Between Allianzgi Diversified and Global Alpha

Can any of the company-specific risk be diversified away by investing in both Allianzgi Diversified and Global Alpha 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 Allianzgi Diversified and Global Alpha into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Diversified Income and The Global Alpha, you can compare the effects of market volatilities on Allianzgi Diversified and Global Alpha 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 Allianzgi Diversified with a short position of Global Alpha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Diversified and Global Alpha.

Diversification Opportunities for Allianzgi Diversified and Global Alpha

-0.02

Correlation Coefficient

Allianzgi Diversified  Global Alpha

Good diversification

The 3 months correlation between Allianzgi and Global is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and The Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Alpha and Allianzgi Diversified 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 Allianzgi Diversified Income are associated (or correlated) with Global Alpha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Alpha has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Global Alpha go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Global Alpha

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to generate 0.49 times more return on investment than Global Alpha. However, Allianzgi Diversified Income is 2.06 times less risky than Global Alpha. It trades about 0.1 of its potential returns per unit of risk. The Global Alpha is currently generating about -0.11 per unit of risk. If you would invest  2,178  in Allianzgi Diversified Income on October 22, 2024 and sell it today you would earn a total of  75.00  from holding Allianzgi Diversified Income or generate 3.44% return on investment over 90 days.

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

Allianzgi Diversified Income  vs.  The Global Alpha

Allianzgi Diversified

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Diversified may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Global Alpha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Global Alpha has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Diversified and Global Alpha

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

The idea behind Allianzgi Diversified Income and The Global Alpha 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.