Correlation Between Amcap Fund and Allianzgi Technology

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

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

Diversification Opportunities for Amcap Fund and Allianzgi Technology

0.31

Correlation Coefficient

Amcap Fund  Allianzgi Technology

Weak diversification

The 3 months correlation between Amcap and Allianzgi is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Amcap Fund Class and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology and Amcap Fund 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 Amcap Fund Class 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 Amcap Fund i.e., Amcap Fund and Allianzgi Technology go up and down completely randomly.

Pair Corralation between Amcap Fund and Allianzgi Technology

Assuming the 90 days horizon Amcap Fund Class is expected to under-perform the Allianzgi Technology. In addition to that, Amcap Fund is 1.12 times more volatile than Allianzgi Technology Fund. It trades about -0.18 of its total potential returns per unit of risk. Allianzgi Technology Fund is currently generating about 0.06 per unit of volatility. If you would invest  6,452  in Allianzgi Technology Fund on October 9, 2024 and sell it today you would earn a total of  103.00  from holding Allianzgi Technology Fund or generate 1.6% return on investment over 90 days.

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

Amcap Fund Class  vs.  Allianzgi Technology Fund

Amcap Fund Class

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Amcap Fund and Allianzgi Technology

The main advantage of trading using opposite Amcap Fund and Allianzgi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcap Fund 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 Amcap Fund Class 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.