Correlation Between Allianzgi Mid-cap and Allianzgi International

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

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

Diversification Opportunities for Allianzgi Mid-cap and Allianzgi International

0.68

Correlation Coefficient

Allianzgi Mid-cap  Allianzgi International

Poor diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Mid Cap Fund and Allianzgi International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi International and Allianzgi Mid-cap 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 Mid Cap Fund are associated (or correlated) with Allianzgi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi International has no effect on the direction of Allianzgi Mid-cap i.e., Allianzgi Mid-cap and Allianzgi International go up and down completely randomly.

Pair Corralation between Allianzgi Mid-cap and Allianzgi International

Assuming the 90 days horizon Allianzgi Mid Cap Fund is expected to under-perform the Allianzgi International. In addition to that, Allianzgi Mid-cap is 2.28 times more volatile than Allianzgi International Small Cap. It trades about -0.07 of its total potential returns per unit of risk. Allianzgi International Small Cap is currently generating about -0.02 per unit of volatility. If you would invest  3,022  in Allianzgi International Small Cap on December 2, 2024 and sell it today you would lose (23.00) from holding Allianzgi International Small Cap or give up 0.76% of portfolio value over 90 days.

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

Allianzgi Mid Cap Fund  vs.  Allianzgi International Small

Allianzgi Mid Cap

Risk-Adjusted Performance

Very Weak

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

Allianzgi International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi International Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi 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 Mid-cap and Allianzgi International

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

The idea behind Allianzgi Mid Cap Fund and Allianzgi International Small Cap 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.