Correlation Between Allianzgi Global and Black Oak

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

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

Diversification Opportunities for Allianzgi Global and Black Oak

0.74

Correlation Coefficient

Allianzgi Global  Black Oak

Poor diversification

The 3 months correlation between Allianzgi and Black is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Global Water and Black Oak Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Oak Emerging and Allianzgi Global 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 Global Water are associated (or correlated) with Black Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Oak Emerging has no effect on the direction of Allianzgi Global i.e., Allianzgi Global and Black Oak go up and down completely randomly.

Pair Corralation between Allianzgi Global and Black Oak

Assuming the 90 days horizon Allianzgi Global Water is expected to under-perform the Black Oak. In addition to that, Allianzgi Global is 1.11 times more volatile than Black Oak Emerging. It trades about -0.32 of its total potential returns per unit of risk. Black Oak Emerging is currently generating about -0.25 per unit of volatility. If you would invest  825.00  in Black Oak Emerging on October 8, 2024 and sell it today you would lose (85.00) from holding Black Oak Emerging or give up 10.3% of portfolio value over 90 days.

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

Allianzgi Global Water  vs.  Black Oak Emerging

Allianzgi Global Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Global Water has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Black Oak Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Oak Emerging has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Global and Black Oak

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

The idea behind Allianzgi Global Water and Black Oak Emerging 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.