Correlation Between Stralem Equity and Allianzgi Diversified

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

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

Diversification Opportunities for Stralem Equity and Allianzgi Diversified

0.64

Correlation Coefficient

Stralem Equity  Allianzgi Diversified

Poor diversification

The 3 months correlation between Stralem and Allianzgi is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Stralem Equity Fund and Allianzgi Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Diversified and Stralem Equity 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 Stralem Equity Fund 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 Stralem Equity i.e., Stralem Equity and Allianzgi Diversified go up and down completely randomly.

Pair Corralation between Stralem Equity and Allianzgi Diversified

Assuming the 90 days horizon Stralem Equity Fund is expected to under-perform the Allianzgi Diversified. But the mutual fund apears to be less risky and, when comparing its historical volatility, Stralem Equity Fund is 1.46 times less risky than Allianzgi Diversified. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Allianzgi Diversified Income is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  2,387  in Allianzgi Diversified Income on October 10, 2024 and sell it today you would lose (80.00) from holding Allianzgi Diversified Income or give up 3.35% of portfolio value over 90 days.

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

Stralem Equity Fund  vs.  Allianzgi Diversified Income

Stralem Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stralem Equity Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Stralem Equity 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

5 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stralem Equity and Allianzgi Diversified

The main advantage of trading using opposite Stralem Equity and Allianzgi Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stralem Equity 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 Stralem Equity Fund 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.