Correlation Between Allianzgi Convertible and Jacob Small

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

Diversification Opportunities for Allianzgi Convertible and Jacob Small

0.41

Correlation Coefficient

Allianzgi Convertible  Jacob Small

Very weak diversification

The 3 months correlation between Allianzgi and Jacob is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Jacob Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Small Cap 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 Jacob Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Small Cap has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Jacob Small go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Jacob Small

Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 20.97 times more return on investment than Jacob Small. However, Allianzgi Convertible is 20.97 times more volatile than Jacob Small Cap. It trades about 0.13 of its potential returns per unit of risk. Jacob Small Cap is currently generating about -0.03 per unit of risk. If you would invest  409.00  in Allianzgi Convertible Income on December 5, 2024 and sell it today you would earn a total of  1,110  from holding Allianzgi Convertible Income or generate 271.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Allianzgi Convertible Income  vs.  Jacob Small Cap

Allianzgi Convertible

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Convertible showed solid returns over the last few months and may actually be approaching a breakup point.

Jacob Small Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jacob Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Jacob Small 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 Jacob Small

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

The idea behind Allianzgi Convertible Income and Jacob Small Cap 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.