Correlation Between Allianzgi Technology and Guggenheim Energy

Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and Guggenheim Energy 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 Guggenheim Energy 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 Guggenheim Energy Income, you can compare the effects of market volatilities on Allianzgi Technology and Guggenheim Energy 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 Guggenheim Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and Guggenheim Energy.

Diversification Opportunities for Allianzgi Technology and Guggenheim Energy

0.54

Correlation Coefficient

Allianzgi Technology  Guggenheim Energy

Very weak diversification

The 3 months correlation between Allianzgi and Guggenheim is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Guggenheim Energy Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Energy Income 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 Guggenheim Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Energy Income has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Guggenheim Energy go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Guggenheim Energy

If you would invest  8,103  in Allianzgi Technology Fund on September 17, 2024 and sell it today you would earn a total of  1,330  from holding Allianzgi Technology Fund or generate 16.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Allianzgi Technology Fund  vs.  Guggenheim Energy Income

Allianzgi Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Guggenheim Energy Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Guggenheim Energy Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Guggenheim Energy 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 Guggenheim Energy

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

The idea behind Allianzgi Technology Fund and Guggenheim Energy 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.