Correlation Between Allianzgi Health and Franklin Moderate

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Can any of the company-specific risk be diversified away by investing in both Allianzgi Health and Franklin Moderate 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 Health and Franklin Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi Health Sciences and Franklin Moderate Allocation, you can compare the effects of market volatilities on Allianzgi Health and Franklin Moderate 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 Health with a short position of Franklin Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Health and Franklin Moderate.

Diversification Opportunities for Allianzgi Health and Franklin Moderate

0.4
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Allianzgi and Franklin is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Health Sciences and Franklin Moderate Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Moderate and Allianzgi Health 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 Health Sciences are associated (or correlated) with Franklin Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Moderate has no effect on the direction of Allianzgi Health i.e., Allianzgi Health and Franklin Moderate go up and down completely randomly.

Pair Corralation between Allianzgi Health and Franklin Moderate

Assuming the 90 days horizon Allianzgi Health Sciences is expected to under-perform the Franklin Moderate. In addition to that, Allianzgi Health is 1.62 times more volatile than Franklin Moderate Allocation. It trades about -0.04 of its total potential returns per unit of risk. Franklin Moderate Allocation is currently generating about 0.07 per unit of volatility. If you would invest  1,579  in Franklin Moderate Allocation on October 25, 2024 and sell it today you would earn a total of  33.00  from holding Franklin Moderate Allocation or generate 2.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Allianzgi Health Sciences  vs.  Franklin Moderate Allocation

 Performance 
       Timeline  
Allianzgi Health Sciences 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Franklin Moderate Allocation are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Franklin Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Health and Franklin Moderate Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allianzgi Health and Franklin Moderate

The main advantage of trading using opposite Allianzgi Health and Franklin Moderate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Health position performs unexpectedly, Franklin Moderate 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 Franklin Moderate will offset losses from the drop in Franklin Moderate's long position.
The idea behind Allianzgi Health Sciences and Franklin Moderate Allocation 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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