Correlation Between Allianzgi Convertible and Franklin Convertible

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

Diversification Opportunities for Allianzgi Convertible and Franklin Convertible

0.99

Correlation Coefficient

Allianzgi Convertible  Franklin Convertible

No risk reduction

The 3 months correlation between Allianzgi and Franklin is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Vertible Fund and Franklin Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Convertible 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 Franklin Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Convertible has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Franklin Convertible go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Franklin Convertible

Assuming the 90 days horizon Allianzgi Vertible Fund is expected to generate 1.13 times more return on investment than Franklin Convertible. However, Allianzgi Convertible is 1.13 times more volatile than Franklin Vertible Securities. It trades about 0.36 of its potential returns per unit of risk. Franklin Vertible Securities is currently generating about 0.4 per unit of risk. If you would invest  3,439  in Allianzgi Vertible Fund on August 31, 2024 and sell it today you would earn a total of  443.00  from holding Allianzgi Vertible Fund or generate 12.88% return on investment over 90 days.

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

Allianzgi Vertible Fund  vs.  Franklin Vertible Securities

Allianzgi Convertible

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Vertible Fund are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Franklin Convertible

Risk-Adjusted Performance

31 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Vertible Securities are ranked lower than 31 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Franklin Convertible may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Allianzgi Convertible and Franklin Convertible

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

The idea behind Allianzgi Vertible Fund and Franklin Vertible Securities 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.

Check out your portfolio center.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.