Correlation Between Allianzgi Small and Allianzgi Short

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

Diversification Opportunities for Allianzgi Small and Allianzgi Short

0.78

Correlation Coefficient

Allianzgi Small  Allianzgi Short

Poor diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Small Cap Fund and Allianzgi Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Short Duration 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Short Duration has no effect on the direction of Allianzgi Small i.e., Allianzgi Small and Allianzgi Short go up and down completely randomly.

Pair Corralation between Allianzgi Small and Allianzgi Short

Assuming the 90 days horizon Allianzgi Small Cap Fund is expected to generate 7.96 times more return on investment than Allianzgi Short. However, Allianzgi Small is 7.96 times more volatile than Allianzgi Short Duration. It trades about 0.18 of its potential returns per unit of risk. Allianzgi Short Duration is currently generating about 0.16 per unit of risk. If you would invest  2,485  in Allianzgi Small Cap Fund on September 3, 2024 and sell it today you would earn a total of  303.00  from holding Allianzgi Small Cap Fund or generate 12.19% return on investment over 90 days.

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

Allianzgi Small Cap Fund  vs.  Allianzgi Short Duration

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 January 2025.

Allianzgi Short Duration

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Short Duration are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Allianzgi Short 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 Small and Allianzgi Short

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

The idea behind Allianzgi Small Cap Fund and Allianzgi Short Duration 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.