Correlation Between Allianzgi Technology and Transamerica Intl

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

Diversification Opportunities for Allianzgi Technology and Transamerica Intl

-0.56

Correlation Coefficient

Allianzgi Technology  Transamerica Intl

Excellent diversification

The 3 months correlation between Allianzgi and Transamerica is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Transamerica Intl Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intl Equity 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 Transamerica Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intl Equity has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Transamerica Intl go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Transamerica Intl

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the Transamerica Intl. In addition to that, Allianzgi Technology is 2.08 times more volatile than Transamerica Intl Equity. It trades about -0.1 of its total potential returns per unit of risk. Transamerica Intl Equity is currently generating about 0.21 per unit of volatility. If you would invest  2,053  in Transamerica Intl Equity on December 25, 2024 and sell it today you would earn a total of  244.00  from holding Transamerica Intl Equity or generate 11.89% return on investment over 90 days.

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

Allianzgi Technology Fund  vs.  Transamerica Intl Equity

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

Transamerica Intl Equity

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Intl Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Transamerica Intl may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Allianzgi Technology and Transamerica Intl

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

The idea behind Allianzgi Technology Fund and Transamerica Intl Equity 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.