Correlation Between Gabelli Global and Allianzgi Diversified

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

By analyzing existing cross correlation between Gabelli Global Mini and Allianzgi Diversified Income, you can compare the effects of market volatilities on Gabelli Global and Allianzgi Diversified 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 Gabelli Global with a short position of Allianzgi Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Allianzgi Diversified.

Diversification Opportunities for Gabelli Global and Allianzgi Diversified

0.8

Correlation Coefficient

Gabelli Global  Allianzgi Diversified

Very poor diversification

The 3 months correlation between Gabelli and Allianzgi is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Mini and Allianzgi Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Diversified and Gabelli Global 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 Gabelli Global Mini are associated (or correlated) with Allianzgi Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Diversified has no effect on the direction of Gabelli Global i.e., Gabelli Global and Allianzgi Diversified go up and down completely randomly.

Pair Corralation between Gabelli Global and Allianzgi Diversified

Assuming the 90 days horizon Gabelli Global Mini is expected to under-perform the Allianzgi Diversified. In addition to that, Gabelli Global is 2.24 times more volatile than Allianzgi Diversified Income. It trades about -0.21 of its total potential returns per unit of risk. Allianzgi Diversified Income is currently generating about -0.13 per unit of volatility. If you would invest  2,302  in Allianzgi Diversified Income on October 7, 2024 and sell it today you would lose (63.00) from holding Allianzgi Diversified Income or give up 2.74% of portfolio value over 90 days.

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

Gabelli Global Mini  vs.  Allianzgi Diversified Income

Gabelli Global Mini

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Mini are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Gabelli Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Diversified

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Gabelli Global and Allianzgi Diversified

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

The idea behind Gabelli Global Mini and Allianzgi Diversified 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..