Correlation Between Allianzgi Health and Bny Mellon

Can any of the company-specific risk be diversified away by investing in both Allianzgi Health 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 Health 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 Health Sciences and Bny Mellon New, you can compare the effects of market volatilities on Allianzgi Health 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 Health with a short position of Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Health and Bny Mellon.

Diversification Opportunities for Allianzgi Health and Bny Mellon

0.48

Correlation Coefficient

Allianzgi Health  Bny Mellon

Very weak diversification

The 3 months correlation between Allianzgi and Bny is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Health Sciences and Bny Mellon New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon New 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 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 New has no effect on the direction of Allianzgi Health i.e., Allianzgi Health and Bny Mellon go up and down completely randomly.

Pair Corralation between Allianzgi Health and Bny Mellon

Assuming the 90 days horizon Allianzgi Health is expected to generate 1.28 times less return on investment than Bny Mellon. In addition to that, Allianzgi Health is 4.12 times more volatile than Bny Mellon New. It trades about 0.02 of its total potential returns per unit of risk. Bny Mellon New is currently generating about 0.11 per unit of volatility. If you would invest  971.00  in Bny Mellon New on October 5, 2024 and sell it today you would earn a total of  72.00  from holding Bny Mellon New or generate 7.42% return on investment over 90 days.

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

Allianzgi Health Sciences  vs.  Bny Mellon New

Allianzgi Health Sciences

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Bny Mellon New

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Allianzgi Health and Bny Mellon

The main advantage of trading using opposite Allianzgi Health and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Health 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 Health Sciences and Bny Mellon New 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.