Correlation Between Allianzgi Technology and F/m Investments

Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and F/m Investments 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 F/m Investments 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 Fm Investments Large, you can compare the effects of market volatilities on Allianzgi Technology and F/m Investments 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 F/m Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and F/m Investments.

Diversification Opportunities for Allianzgi Technology and F/m Investments

0.55

Correlation Coefficient

Allianzgi Technology  F/m Investments

Very weak diversification

The 3 months correlation between Allianzgi and F/m is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Fm Investments Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fm Investments Large 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 F/m Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fm Investments Large has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and F/m Investments go up and down completely randomly.

Pair Corralation between Allianzgi Technology and F/m Investments

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the F/m Investments. In addition to that, Allianzgi Technology is 1.18 times more volatile than Fm Investments Large. It trades about -0.07 of its total potential returns per unit of risk. Fm Investments Large is currently generating about -0.06 per unit of volatility. If you would invest  1,780  in Fm Investments Large on December 2, 2024 and sell it today you would lose (69.00) from holding Fm Investments Large or give up 3.88% of portfolio value over 90 days.

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

Allianzgi Technology Fund  vs.  Fm Investments Large

Allianzgi Technology

Risk-Adjusted Performance

Very Weak

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

Fm Investments Large

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fm Investments Large has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Allianzgi Technology and F/m Investments

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

The idea behind Allianzgi Technology Fund and Fm Investments Large 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.