Correlation Between City National and Allianzgi Diversified

Can any of the company-specific risk be diversified away by investing in both City National and Allianzgi Diversified 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 City National and Allianzgi Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between City National Rochdale and Allianzgi Diversified Income, you can compare the effects of market volatilities on City National and Allianzgi Diversified 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 City National with a short position of Allianzgi Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Allianzgi Diversified.

Diversification Opportunities for City National and Allianzgi Diversified

0.6

Correlation Coefficient

City National  Allianzgi Diversified

Poor diversification

The 3 months correlation between City and Allianzgi is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Allianzgi Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Diversified and City National 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 City National Rochdale are associated (or correlated) with Allianzgi Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Diversified has no effect on the direction of City National i.e., City National and Allianzgi Diversified go up and down completely randomly.

Pair Corralation between City National and Allianzgi Diversified

Assuming the 90 days horizon City National is expected to generate 10.41 times less return on investment than Allianzgi Diversified. But when comparing it to its historical volatility, City National Rochdale is 10.36 times less risky than Allianzgi Diversified. It trades about 0.24 of its potential returns per unit of risk. Allianzgi Diversified Income is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,054  in Allianzgi Diversified Income on September 12, 2024 and sell it today you would earn a total of  278.00  from holding Allianzgi Diversified Income or generate 13.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

City National Rochdale  vs.  Allianzgi Diversified Income

City National Rochdale

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in City National Rochdale are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, City National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Diversified

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Diversified showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with City National and Allianzgi Diversified

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

The idea behind City National Rochdale and Allianzgi Diversified 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.