Correlation Between Bond Fund and Allianzgi Convertible

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

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

Diversification Opportunities for Bond Fund and Allianzgi Convertible

-0.57

Correlation Coefficient

Bond Fund  Allianzgi Convertible

Excellent diversification

The 3 months correlation between Bond and Allianzgi is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Bond Fund Of and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Bond Fund 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 Bond Fund Of 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 Bond Fund i.e., Bond Fund and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Bond Fund and Allianzgi Convertible

Assuming the 90 days horizon Bond Fund Of is expected to under-perform the Allianzgi Convertible. But the mutual fund apears to be less risky and, when comparing its historical volatility, Bond Fund Of is 1.94 times less risky than Allianzgi Convertible. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Allianzgi Convertible Income is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  364.00  in Allianzgi Convertible Income on September 12, 2024 and sell it today you would earn a total of  42.00  from holding Allianzgi Convertible Income or generate 11.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Bond Fund Of  vs.  Allianzgi Convertible Income

Bond Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi Convertible

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Bond Fund and Allianzgi Convertible

The main advantage of trading using opposite Bond Fund and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bond Fund 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 Bond Fund Of and Allianzgi Convertible Income 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.