Correlation Between Cornerstone Strategic and Allianzgi Convertible

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

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

Diversification Opportunities for Cornerstone Strategic and Allianzgi Convertible

0.84

Correlation Coefficient

Cornerstone Strategic  Allianzgi Convertible

Very poor diversification

The 3 months correlation between Cornerstone and Allianzgi is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cornerstone Strategic Return and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Cornerstone Strategic 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 Cornerstone Strategic Return 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 Cornerstone Strategic i.e., Cornerstone Strategic and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Cornerstone Strategic and Allianzgi Convertible

Considering the 90-day investment horizon Cornerstone Strategic Return is expected to generate 0.82 times more return on investment than Allianzgi Convertible. However, Cornerstone Strategic Return is 1.22 times less risky than Allianzgi Convertible. It trades about 0.44 of its potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.18 per unit of risk. If you would invest  746.00  in Cornerstone Strategic Return on September 3, 2024 and sell it today you would earn a total of  184.00  from holding Cornerstone Strategic Return or generate 24.66% return on investment over 90 days.

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

Cornerstone Strategic Return  vs.  Allianzgi Convertible Income

Cornerstone Strategic

Risk-Adjusted Performance

34 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cornerstone Strategic Return are ranked lower than 34 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly unfluctuating basic indicators, Cornerstone Strategic reported solid returns over the last few months and may actually be approaching a breakup point.

Allianzgi Convertible

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile fundamental indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Cornerstone Strategic and Allianzgi Convertible

The main advantage of trading using opposite Cornerstone Strategic and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornerstone Strategic 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 Cornerstone Strategic Return 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.