Correlation Between Allianzgi Small and Allianzgi Convertible

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

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

Diversification Opportunities for Allianzgi Small and Allianzgi Convertible

0.95

Correlation Coefficient

Allianzgi Small  Allianzgi Convertible

Almost no diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Small Cap Fund and Allianzgi Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Allianzgi Small 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 Small Cap Fund are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Allianzgi Small i.e., Allianzgi Small and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Allianzgi Small and Allianzgi Convertible

Assuming the 90 days horizon Allianzgi Small is expected to generate 1.03 times less return on investment than Allianzgi Convertible. In addition to that, Allianzgi Small is 1.88 times more volatile than Allianzgi Vertible Fund. It trades about 0.19 of its total potential returns per unit of risk. Allianzgi Vertible Fund is currently generating about 0.36 per unit of volatility. 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 Small Cap Fund  vs.  Allianzgi Vertible Fund

Allianzgi Small Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Small Cap Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Allianzgi Small may actually be approaching a critical reversion point that can send shares even higher in December 2024.

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.

Pair Trading with Allianzgi Small and Allianzgi Convertible

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

The idea behind Allianzgi Small Cap Fund and Allianzgi Vertible 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.