Correlation Between Allianzgi Equity and BlackRock Energy

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

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

Diversification Opportunities for Allianzgi Equity and BlackRock Energy

0.09

Correlation Coefficient

Allianzgi Equity  BlackRock Energy

Significant diversification

The 3 months correlation between Allianzgi and BlackRock is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Equity Convertible and BlackRock Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Energy and Allianzgi Equity 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 Equity Convertible are associated (or correlated) with BlackRock Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Energy has no effect on the direction of Allianzgi Equity i.e., Allianzgi Equity and BlackRock Energy go up and down completely randomly.

Pair Corralation between Allianzgi Equity and BlackRock Energy

Considering the 90-day investment horizon Allianzgi Equity Convertible is expected to under-perform the BlackRock Energy. In addition to that, Allianzgi Equity is 1.25 times more volatile than BlackRock Energy and. It trades about -0.09 of its total potential returns per unit of risk. BlackRock Energy and is currently generating about 0.19 per unit of volatility. If you would invest  1,229  in BlackRock Energy and on December 27, 2024 and sell it today you would earn a total of  137.00  from holding BlackRock Energy and or generate 11.15% return on investment over 90 days.

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

Allianzgi Equity Convertible  vs.  BlackRock Energy and

Allianzgi Equity Con

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Equity Convertible has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest inconsistent performance, the Fund's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the fund shareholders.

BlackRock Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish technical and fundamental indicators, BlackRock Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Allianzgi Equity and BlackRock Energy

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

The idea behind Allianzgi Equity Convertible and BlackRock Energy and 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.