Correlation Between Allianzgi International and Allianzgi Focused

Can any of the company-specific risk be diversified away by investing in both Allianzgi International and Allianzgi Focused 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 Focused 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 Focused Growth, you can compare the effects of market volatilities on Allianzgi International and Allianzgi Focused 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 Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi International and Allianzgi Focused.

Diversification Opportunities for Allianzgi International and Allianzgi Focused

-0.55

Correlation Coefficient

Allianzgi International  Allianzgi Focused

Excellent diversification

The 3 months correlation between Allianzgi and Allianzgi is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi International Small and Allianzgi Focused Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Focused Growth 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 Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Focused Growth has no effect on the direction of Allianzgi International i.e., Allianzgi International and Allianzgi Focused go up and down completely randomly.

Pair Corralation between Allianzgi International and Allianzgi Focused

Assuming the 90 days horizon Allianzgi International Small Cap is expected to under-perform the Allianzgi Focused. But the mutual fund apears to be less risky and, when comparing its historical volatility, Allianzgi International Small Cap is 1.6 times less risky than Allianzgi Focused. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Allianzgi Focused Growth is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  3,236  in Allianzgi Focused Growth on September 5, 2024 and sell it today you would earn a total of  496.00  from holding Allianzgi Focused Growth or generate 15.33% 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 Focused Growth

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 Focused Growth

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Focused Growth are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Focused showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi International and Allianzgi Focused

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

The idea behind Allianzgi International Small Cap and Allianzgi Focused Growth 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..