Correlation Between Allianzgi Convertible and CBH

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

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

Diversification Opportunities for Allianzgi Convertible and CBH

0.78

Correlation Coefficient

Allianzgi Convertible  CBH

Poor diversification

The 3 months correlation between Allianzgi and CBH is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Allianzgi Convertible 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 Allianzgi Convertible Income are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and CBH go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and CBH

Considering the 90-day investment horizon Allianzgi Convertible Income is expected to generate 2.3 times more return on investment than CBH. However, Allianzgi Convertible is 2.3 times more volatile than CBH. It trades about 0.06 of its potential returns per unit of risk. CBH is currently generating about 0.06 per unit of risk. If you would invest  227.00  in Allianzgi Convertible Income on September 26, 2024 and sell it today you would earn a total of  91.00  from holding Allianzgi Convertible Income or generate 40.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	84.07%
Values	Daily Returns

Allianzgi Convertible Income  vs.  CBH

Allianzgi Convertible

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal fundamental indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Allianzgi Convertible and CBH

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

The idea behind Allianzgi Convertible Income and CBH 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.