Correlation Between Dreyfus Government and Allianzgi Global

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

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

Diversification Opportunities for Dreyfus Government and Allianzgi Global

-0.11

Correlation Coefficient

Dreyfus Government  Allianzgi Global

Good diversification

The 3 months correlation between Dreyfus and Allianzgi is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Dreyfus Government Cash and Allianzgi Global Sustainabilit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Sus and Dreyfus Government 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 Dreyfus Government Cash are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global Sus has no effect on the direction of Dreyfus Government i.e., Dreyfus Government and Allianzgi Global go up and down completely randomly.

Pair Corralation between Dreyfus Government and Allianzgi Global

Assuming the 90 days horizon Dreyfus Government is expected to generate 1.03 times less return on investment than Allianzgi Global. But when comparing it to its historical volatility, Dreyfus Government Cash is 6.96 times less risky than Allianzgi Global. It trades about 0.13 of its potential returns per unit of risk. Allianzgi Global Sustainability is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,388  in Allianzgi Global Sustainability on September 30, 2024 and sell it today you would earn a total of  22.00  from holding Allianzgi Global Sustainability or generate 1.59% return on investment over 90 days.

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

Dreyfus Government Cash  vs.  Allianzgi Global Sustainabilit

Dreyfus Government Cash

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi Global Sus

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dreyfus Government and Allianzgi Global

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

The idea behind Dreyfus Government Cash and Allianzgi Global Sustainability 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.