Correlation Between Allianzgi Convertible and Balter Invenomic

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

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

Diversification Opportunities for Allianzgi Convertible and Balter Invenomic

-0.33

Correlation Coefficient

Allianzgi Convertible  Balter Invenomic

Very good diversification

The 3 months correlation between Allianzgi and Balter is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Balter Invenomic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balter Invenomic and Allianzgi Convertible 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 Convertible Income are associated (or correlated) with Balter Invenomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balter Invenomic has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Balter Invenomic go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Balter Invenomic

Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 0.94 times more return on investment than Balter Invenomic. However, Allianzgi Convertible Income is 1.06 times less risky than Balter Invenomic. It trades about 0.31 of its potential returns per unit of risk. Balter Invenomic Fund is currently generating about -0.08 per unit of risk. If you would invest  363.00  in Allianzgi Convertible Income on September 2, 2024 and sell it today you would earn a total of  45.00  from holding Allianzgi Convertible Income or generate 12.4% return on investment over 90 days.

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

Allianzgi Convertible Income  vs.  Balter Invenomic Fund

Allianzgi Convertible

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 24 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Balter Invenomic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balter Invenomic Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Balter Invenomic 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 Convertible and Balter Invenomic

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

The idea behind Allianzgi Convertible Income and Balter Invenomic Fund 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.