Correlation Between Allianzgi Nfj and Kopernik International

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

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

Diversification Opportunities for Allianzgi Nfj and Kopernik International

-0.28

Correlation Coefficient

Allianzgi Nfj  Kopernik International

Very good diversification

The 3 months correlation between Allianzgi and Kopernik is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Nfj Mid Cap and Kopernik International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kopernik International 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 Mid Cap are associated (or correlated) with Kopernik International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kopernik International has no effect on the direction of Allianzgi Nfj i.e., Allianzgi Nfj and Kopernik International go up and down completely randomly.

Pair Corralation between Allianzgi Nfj and Kopernik International

Assuming the 90 days horizon Allianzgi Nfj is expected to generate 437.6 times less return on investment than Kopernik International. In addition to that, Allianzgi Nfj is 1.18 times more volatile than Kopernik International. It trades about 0.0 of its total potential returns per unit of risk. Kopernik International is currently generating about 0.32 per unit of volatility. If you would invest  1,262  in Kopernik International on December 30, 2024 and sell it today you would earn a total of  181.00  from holding Kopernik International or generate 14.34% return on investment over 90 days.

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

Allianzgi Nfj Mid Cap  vs.  Kopernik International

Allianzgi Nfj Mid

Risk-Adjusted Performance

Very Weak

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

Kopernik International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kopernik International are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Kopernik International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi Nfj and Kopernik International

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

The idea behind Allianzgi Nfj Mid Cap and Kopernik International 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.