Correlation Between Stocksplus Total and Allianzgi Income

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

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

Diversification Opportunities for Stocksplus Total and Allianzgi Income

0.68

Correlation Coefficient

Stocksplus Total  Allianzgi Income

Poor diversification

The 3 months correlation between Stocksplus and Allianzgi is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stocksplus Total Return and Allianzgi Income Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Income Growth and Stocksplus Total 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 Stocksplus Total Return are associated (or correlated) with Allianzgi Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Income Growth has no effect on the direction of Stocksplus Total i.e., Stocksplus Total and Allianzgi Income go up and down completely randomly.

Pair Corralation between Stocksplus Total and Allianzgi Income

Assuming the 90 days horizon Stocksplus Total Return is expected to under-perform the Allianzgi Income. In addition to that, Stocksplus Total is 2.12 times more volatile than Allianzgi Income Growth. It trades about -0.08 of its total potential returns per unit of risk. Allianzgi Income Growth is currently generating about -0.05 per unit of volatility. If you would invest  1,207  in Allianzgi Income Growth on December 1, 2024 and sell it today you would lose (18.00) from holding Allianzgi Income Growth or give up 1.49% of portfolio value over 90 days.

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

Stocksplus Total Return  vs.  Allianzgi Income Growth

Stocksplus Total Return

Risk-Adjusted Performance

Very Weak

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

Allianzgi Income Growth

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Stocksplus Total and Allianzgi Income

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

The idea behind Stocksplus Total Return and Allianzgi Income Growth 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.