Correlation Between Allianzgi Technology and Dfa International

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

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

Diversification Opportunities for Allianzgi Technology and Dfa International

-0.08

Correlation Coefficient

Allianzgi Technology  Dfa International

Good diversification

The 3 months correlation between Allianzgi and Dfa is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Dfa International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa International Real and Allianzgi Technology 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 Technology Fund are associated (or correlated) with Dfa International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa International Real has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Dfa International go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Dfa International

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the Dfa International. In addition to that, Allianzgi Technology is 2.09 times more volatile than Dfa International Real. It trades about -0.05 of its total potential returns per unit of risk. Dfa International Real is currently generating about -0.06 per unit of volatility. If you would invest  347.00  in Dfa International Real on December 2, 2024 and sell it today you would lose (11.00) from holding Dfa International Real or give up 3.17% of portfolio value over 90 days.

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

Allianzgi Technology Fund  vs.  Dfa International Real

Allianzgi Technology

Risk-Adjusted Performance

Very Weak

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

Dfa International Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dfa International Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dfa International 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 Technology and Dfa International

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

The idea behind Allianzgi Technology Fund and Dfa International Real 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 Anywhere module to track or share privately all of your investments from the convenience of any device.