Correlation Between Investcorp Credit and Allianzgi Convertible

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

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

Diversification Opportunities for Investcorp Credit and Allianzgi Convertible

0.55

Correlation Coefficient

Investcorp Credit  Allianzgi Convertible

Very weak diversification

The 3 months correlation between Investcorp and Allianzgi is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Investcorp Credit Management and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Investcorp Credit 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 Investcorp Credit Management are associated (or correlated) with Allianzgi Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Convertible has no effect on the direction of Investcorp Credit i.e., Investcorp Credit and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Investcorp Credit and Allianzgi Convertible

Given the investment horizon of 90 days Investcorp Credit is expected to generate 2.36 times less return on investment than Allianzgi Convertible. In addition to that, Investcorp Credit is 1.22 times more volatile than Allianzgi Convertible Income. It trades about 0.05 of its total potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.14 per unit of volatility. If you would invest  297.00  in Allianzgi Convertible Income on October 25, 2024 and sell it today you would earn a total of  30.00  from holding Allianzgi Convertible Income or generate 10.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Investcorp Credit Management  vs.  Allianzgi Convertible Income

Investcorp Credit

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Investcorp Credit Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong primary indicators, Investcorp Credit is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Convertible

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly fragile fundamental indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Investcorp Credit and Allianzgi Convertible

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

The idea behind Investcorp Credit Management and Allianzgi Convertible 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.