Correlation Between Allianzgi Diversified and Old Westbury

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

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

Diversification Opportunities for Allianzgi Diversified and Old Westbury

-0.03

Correlation Coefficient

Allianzgi Diversified  Old Westbury

Good diversification

The 3 months correlation between Allianzgi and Old is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Old Westbury California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury California and Allianzgi Diversified 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 Diversified Income are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury California has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Old Westbury go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Old Westbury

Assuming the 90 days horizon Allianzgi Diversified Income is expected to under-perform the Old Westbury. In addition to that, Allianzgi Diversified is 6.33 times more volatile than Old Westbury California. It trades about -0.12 of its total potential returns per unit of risk. Old Westbury California is currently generating about 0.01 per unit of volatility. If you would invest  963.00  in Old Westbury California on December 21, 2024 and sell it today you would earn a total of  1.00  from holding Old Westbury California or generate 0.1% return on investment over 90 days.

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

Allianzgi Diversified Income  vs.  Old Westbury California

Allianzgi Diversified

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Diversified Income 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.

Old Westbury California

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Allianzgi Diversified and Old Westbury

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

The idea behind Allianzgi Diversified Income and Old Westbury California 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.