Correlation Between Lsv Small and Allianzgi Nfj

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

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

Diversification Opportunities for Lsv Small and Allianzgi Nfj

-0.38

Correlation Coefficient

Lsv Small  Allianzgi Nfj

Very good diversification

The 3 months correlation between Lsv and Allianzgi is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Lsv Small Cap and Allianzgi Nfj International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Intern and Lsv 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 Lsv Small Cap are associated (or correlated) with Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Intern has no effect on the direction of Lsv Small i.e., Lsv Small and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between Lsv Small and Allianzgi Nfj

Assuming the 90 days horizon Lsv Small Cap is expected to generate 1.38 times more return on investment than Allianzgi Nfj. However, Lsv Small is 1.38 times more volatile than Allianzgi Nfj International. It trades about 0.04 of its potential returns per unit of risk. Allianzgi Nfj International is currently generating about -0.01 per unit of risk. If you would invest  1,788  in Lsv Small Cap on September 29, 2024 and sell it today you would earn a total of  117.00  from holding Lsv Small Cap or generate 6.54% return on investment over 90 days.

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

Lsv Small Cap  vs.  Allianzgi Nfj International

Lsv Small Cap

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi Nfj Intern

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Lsv Small and Allianzgi Nfj

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

The idea behind Lsv Small Cap and Allianzgi Nfj International 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.