Correlation Between Allianzgi International and Allianzgi Mid-cap

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

By analyzing existing cross correlation between Allianzgi International Small Cap and Allianzgi Mid Cap Fund, you can compare the effects of market volatilities on Allianzgi International and Allianzgi Mid-cap 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 International with a short position of Allianzgi Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi International and Allianzgi Mid-cap.

Diversification Opportunities for Allianzgi International and Allianzgi Mid-cap

-0.57

Correlation Coefficient

Allianzgi International  Allianzgi Mid-cap

Excellent diversification

The 3 months correlation between Allianzgi and Allianzgi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi International Small and Allianzgi Mid Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Mid Cap and Allianzgi International 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 International Small Cap are associated (or correlated) with Allianzgi Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Mid Cap has no effect on the direction of Allianzgi International i.e., Allianzgi International and Allianzgi Mid-cap go up and down completely randomly.

Pair Corralation between Allianzgi International and Allianzgi Mid-cap

Assuming the 90 days horizon Allianzgi International Small Cap is expected to under-perform the Allianzgi Mid-cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Allianzgi International Small Cap is 1.55 times less risky than Allianzgi Mid-cap. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Allianzgi Mid Cap Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  520.00  in Allianzgi Mid Cap Fund on September 4, 2024 and sell it today you would earn a total of  109.00  from holding Allianzgi Mid Cap Fund or generate 20.96% return on investment over 90 days.

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

Allianzgi International Small   vs.  Allianzgi Mid Cap Fund

Allianzgi International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi International Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Mid Cap

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Mid-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi International and Allianzgi Mid-cap

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

The idea behind Allianzgi International Small Cap and Allianzgi Mid Cap Fund 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.