Correlation Between Aberdeen Global and Allianzgi Convertible

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

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

Diversification Opportunities for Aberdeen Global and Allianzgi Convertible

0.07

Correlation Coefficient

Aberdeen Global  Allianzgi Convertible

Significant diversification

The 3 months correlation between Aberdeen and Allianzgi is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Aberdeen Global 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 Aberdeen Global Dynamic are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Aberdeen Global and Allianzgi Convertible

Considering the 90-day investment horizon Aberdeen Global is expected to generate 1.35 times less return on investment than Allianzgi Convertible. But when comparing it to its historical volatility, Aberdeen Global Dynamic is 1.25 times less risky than Allianzgi Convertible. It trades about 0.05 of its potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  264.00  in Allianzgi Convertible Income on September 24, 2024 and sell it today you would earn a total of  88.00  from holding Allianzgi Convertible Income or generate 33.33% return on investment over 90 days.

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

Aberdeen Global Dynamic  vs.  Allianzgi Convertible Income

Aberdeen Global Dynamic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aberdeen Global Dynamic has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Allianzgi Convertible

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable fundamental indicators, Allianzgi Convertible is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aberdeen Global and Allianzgi Convertible

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

The idea behind Aberdeen Global Dynamic and Allianzgi Convertible Income 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.