Correlation Between Davenport Small and Allianzgi Technology

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

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

Diversification Opportunities for Davenport Small and Allianzgi Technology

0.95

Correlation Coefficient

Davenport Small  Allianzgi Technology

Almost no diversification

The 3 months correlation between Davenport and Allianzgi is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Davenport Small Cap and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology and Davenport Small 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 Davenport Small Cap are associated (or correlated) with Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of Davenport Small i.e., Davenport Small and Allianzgi Technology go up and down completely randomly.

Pair Corralation between Davenport Small and Allianzgi Technology

Assuming the 90 days horizon Davenport Small Cap is expected to generate 0.56 times more return on investment than Allianzgi Technology. However, Davenport Small Cap is 1.78 times less risky than Allianzgi Technology. It trades about -0.13 of its potential returns per unit of risk. Allianzgi Technology Fund is currently generating about -0.11 per unit of risk. If you would invest  1,761  in Davenport Small Cap on December 23, 2024 and sell it today you would lose (143.00) from holding Davenport Small Cap or give up 8.12% of portfolio value over 90 days.

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

Davenport Small Cap  vs.  Allianzgi Technology Fund

Davenport Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Davenport Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

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 weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Davenport Small and Allianzgi Technology

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

The idea behind Davenport Small Cap and Allianzgi Technology Fund 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.