Correlation Between Allianzgi Mid and Allianzgi Global

Can any of the company-specific risk be diversified away by investing in both Allianzgi Mid 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 Allianzgi Mid and Allianzgi Global 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 Global Water, you can compare the effects of market volatilities on Allianzgi Mid 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 Allianzgi Mid with a short position of Allianzgi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Mid and Allianzgi Global.

Diversification Opportunities for Allianzgi Mid and Allianzgi Global

-0.01

Correlation Coefficient

Allianzgi Mid  Allianzgi Global

Good diversification

The 3 months correlation between Allianzgi and Allianzgi is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Mid Cap Fund and Allianzgi Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Water and Allianzgi Mid 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 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 Water has no effect on the direction of Allianzgi Mid i.e., Allianzgi Mid and Allianzgi Global go up and down completely randomly.

Pair Corralation between Allianzgi Mid and Allianzgi Global

Assuming the 90 days horizon Allianzgi Mid Cap Fund is expected to generate 0.57 times more return on investment than Allianzgi Global. However, Allianzgi Mid Cap Fund is 1.76 times less risky than Allianzgi Global. It trades about -0.21 of its potential returns per unit of risk. Allianzgi Global Water is currently generating about -0.32 per unit of risk. If you would invest  623.00  in Allianzgi Mid Cap Fund on October 16, 2024 and sell it today you would lose (34.00) from holding Allianzgi Mid Cap Fund or give up 5.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Allianzgi Mid Cap Fund  vs.  Allianzgi Global Water

Allianzgi Mid Cap

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Allianzgi Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Global Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Global Water has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Allianzgi Mid and Allianzgi Global

The main advantage of trading using opposite Allianzgi Mid and Allianzgi Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Mid 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 Allianzgi Mid Cap Fund and Allianzgi Global Water 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.