Correlation Between Aberdeen Global and Allianzgi Equity

Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Allianzgi 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 Aberdeen Global and Allianzgi Equity 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 Equity Convertible, you can compare the effects of market volatilities on Aberdeen Global and Allianzgi 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 Aberdeen Global with a short position of Allianzgi Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Allianzgi Equity.

Diversification Opportunities for Aberdeen Global and Allianzgi Equity

0.51

Correlation Coefficient

Aberdeen Global  Allianzgi Equity

Very weak diversification

The 3 months correlation between Aberdeen and Allianzgi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and Allianzgi Equity Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Equity Con 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 Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Equity Con has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Allianzgi Equity go up and down completely randomly.

Pair Corralation between Aberdeen Global and Allianzgi Equity

Considering the 90-day investment horizon Aberdeen Global Dynamic is expected to generate 0.94 times more return on investment than Allianzgi Equity. However, Aberdeen Global Dynamic is 1.07 times less risky than Allianzgi Equity. It trades about 0.28 of its potential returns per unit of risk. Allianzgi Equity Convertible is currently generating about -0.25 per unit of risk. If you would invest  998.00  in Aberdeen Global Dynamic on December 4, 2024 and sell it today you would earn a total of  37.00  from holding Aberdeen Global Dynamic or generate 3.71% return on investment over 90 days.

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

Aberdeen Global Dynamic  vs.  Allianzgi Equity Convertible

Aberdeen Global Dynamic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Dynamic are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Allianzgi Equity Con

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Equity Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound forward indicators, Allianzgi Equity is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Aberdeen Global and Allianzgi Equity

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

The idea behind Aberdeen Global Dynamic and Allianzgi Equity Convertible 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.