Correlation Between Allianzgi Convertible and BNY Mellon

Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and BNY Mellon 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 BNY Mellon 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 BNY Mellon High, you can compare the effects of market volatilities on Allianzgi Convertible and BNY Mellon 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 BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and BNY Mellon.

Diversification Opportunities for Allianzgi Convertible and BNY Mellon

0.55

Correlation Coefficient

Allianzgi Convertible  BNY Mellon

Very weak diversification

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

Pair Corralation between Allianzgi Convertible and BNY Mellon

Considering the 90-day investment horizon Allianzgi Convertible is expected to generate 1.35 times less return on investment than BNY Mellon. In addition to that, Allianzgi Convertible is 1.48 times more volatile than BNY Mellon High. It trades about 0.04 of its total potential returns per unit of risk. BNY Mellon High is currently generating about 0.09 per unit of volatility. If you would invest  185.00  in BNY Mellon High on November 29, 2024 and sell it today you would earn a total of  74.00  from holding BNY Mellon High or generate 40.0% return on investment over 90 days.

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

Allianzgi Convertible Income  vs.  BNY Mellon High

Allianzgi Convertible

Risk-Adjusted Performance

Very Weak

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

BNY Mellon High

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon High are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, BNY Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Allianzgi Convertible and BNY Mellon

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

The idea behind Allianzgi Convertible Income and BNY Mellon High 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.