Correlation Between Allianzgi Technology and Franklin High

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

Diversification Opportunities for Allianzgi Technology and Franklin High

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Allianzgi and Franklin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Franklin High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Income and Allianzgi Technology 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 Technology Fund are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Income has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Franklin High go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Franklin High

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the Franklin High. In addition to that, Allianzgi Technology is 5.7 times more volatile than Franklin High Income. It trades about -0.02 of its total potential returns per unit of risk. Franklin High Income is currently generating about -0.1 per unit of volatility. If you would invest  176.00  in Franklin High Income on October 10, 2024 and sell it today you would lose (1.00) from holding Franklin High Income or give up 0.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Allianzgi Technology Fund  vs.  Franklin High Income

 Performance 
       Timeline  
Allianzgi Technology 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Franklin High Income 

Risk-Adjusted Performance

0 of 100

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

Allianzgi Technology and Franklin High Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allianzgi Technology and Franklin High

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

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