Correlation Between Allianzgi Convertible and Allianzgi Global

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

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

Diversification Opportunities for Allianzgi Convertible and Allianzgi Global

0.67

Correlation Coefficient

Allianzgi Convertible  Allianzgi Global

Poor diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Vertible Fund and Allianzgi Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global All and Allianzgi Convertible 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 Vertible Fund are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global All has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Allianzgi Global go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Allianzgi Global

Assuming the 90 days horizon Allianzgi Vertible Fund is expected to under-perform the Allianzgi Global. In addition to that, Allianzgi Convertible is 1.34 times more volatile than Allianzgi Global Allocation. It trades about -0.05 of its total potential returns per unit of risk. Allianzgi Global Allocation is currently generating about -0.02 per unit of volatility. If you would invest  1,090  in Allianzgi Global Allocation on December 29, 2024 and sell it today you would lose (9.00) from holding Allianzgi Global Allocation or give up 0.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Allianzgi Vertible Fund  vs.  Allianzgi Global Allocation

Allianzgi Convertible

Risk-Adjusted Performance

Very Weak

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

Allianzgi Global All

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Allianzgi Convertible and Allianzgi Global

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

The idea behind Allianzgi Vertible Fund and Allianzgi Global Allocation 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.