Correlation Between Allianzgi Convertible and General Money

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

Diversification Opportunities for Allianzgi Convertible and General Money

0.25
  Correlation Coefficient

Modest diversification

The 3 months correlation between Allianzgi and General is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and General Money Market in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Money Market 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 General Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Money Market has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and General Money go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and General Money

Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 0.86 times more return on investment than General Money. However, Allianzgi Convertible Income is 1.16 times less risky than General Money. It trades about 0.05 of its potential returns per unit of risk. General Money Market is currently generating about 0.02 per unit of risk. If you would invest  336.00  in Allianzgi Convertible Income on September 29, 2024 and sell it today you would earn a total of  55.00  from holding Allianzgi Convertible Income or generate 16.37% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.14%
ValuesDaily Returns

Allianzgi Convertible Income  vs.  General Money Market

 Performance 
       Timeline  
Allianzgi Convertible 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
General Money Market 

Risk-Adjusted Performance

0 of 100

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

Allianzgi Convertible and General Money Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Allianzgi Convertible and General Money

The main advantage of trading using opposite Allianzgi Convertible and General Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, General Money 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 General Money will offset losses from the drop in General Money's long position.
The idea behind Allianzgi Convertible Income and General Money Market 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.

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