Correlation Between Allianzgi Nfj and Allianzgi Mid

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

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

Diversification Opportunities for Allianzgi Nfj and Allianzgi Mid

-0.54

Correlation Coefficient

Allianzgi Nfj  Allianzgi Mid

Excellent diversification

The 3 months correlation between Allianzgi and Allianzgi is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Nfj International 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 Nfj 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 Nfj International are associated (or correlated) with Allianzgi Mid. 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 Nfj i.e., Allianzgi Nfj and Allianzgi Mid go up and down completely randomly.

Pair Corralation between Allianzgi Nfj and Allianzgi Mid

Assuming the 90 days horizon Allianzgi Nfj is expected to generate 3.08 times less return on investment than Allianzgi Mid. But when comparing it to its historical volatility, Allianzgi Nfj International is 2.19 times less risky than Allianzgi Mid. It trades about 0.11 of its potential returns per unit of risk. Allianzgi Mid Cap Fund is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  462.00  in Allianzgi Mid Cap Fund on September 19, 2024 and sell it today you would earn a total of  15.00  from holding Allianzgi Mid Cap Fund or generate 3.25% return on investment over 90 days.

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

Allianzgi Nfj International  vs.  Allianzgi Mid Cap Fund

Allianzgi Nfj Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Nfj International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi Nfj 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

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Mid may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Allianzgi Nfj and Allianzgi Mid

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

The idea behind Allianzgi Nfj International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.