Correlation Between Allianzgi Equity and Sprott Physical

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

Diversification Opportunities for Allianzgi Equity and Sprott Physical

-0.52

Correlation Coefficient

Allianzgi Equity  Sprott Physical

Excellent diversification

The 3 months correlation between Allianzgi and Sprott is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Equity Convertible and Sprott Physical Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Silver 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Silver has no effect on the direction of Allianzgi Equity i.e., Allianzgi Equity and Sprott Physical go up and down completely randomly.

Pair Corralation between Allianzgi Equity and Sprott Physical

Considering the 90-day investment horizon Allianzgi Equity Convertible is expected to under-perform the Sprott Physical. But the fund apears to be less risky and, when comparing its historical volatility, Allianzgi Equity Convertible is 1.11 times less risky than Sprott Physical. The fund trades about -0.11 of its potential returns per unit of risk. The Sprott Physical Silver is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  966.00  in Sprott Physical Silver on December 29, 2024 and sell it today you would earn a total of  192.00  from holding Sprott Physical Silver or generate 19.88% return on investment over 90 days.

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

Allianzgi Equity Convertible  vs.  Sprott Physical Silver

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.

Sprott Physical Silver

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sprott Physical Silver are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, Sprott Physical showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi Equity and Sprott Physical

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

The idea behind Allianzgi Equity Convertible and Sprott Physical Silver 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.