Correlation Between Allianzgi Convertible and Clearbridge Value

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

Diversification Opportunities for Allianzgi Convertible and Clearbridge Value

0.25

Correlation Coefficient

Allianzgi Convertible  Clearbridge Value

Modest diversification

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

Pair Corralation between Allianzgi Convertible and Clearbridge Value

Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 0.59 times more return on investment than Clearbridge Value. However, Allianzgi Convertible Income is 1.69 times less risky than Clearbridge Value. It trades about 0.11 of its potential returns per unit of risk. Clearbridge Value Trust is currently generating about 0.01 per unit of risk. If you would invest  357.00  in Allianzgi Convertible Income on October 26, 2024 and sell it today you would earn a total of  39.00  from holding Allianzgi Convertible Income or generate 10.92% return on investment over 90 days.

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

Allianzgi Convertible Income  vs.  Clearbridge Value Trust

Allianzgi Convertible

Risk-Adjusted Performance

7 of 100

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.

Clearbridge Value Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clearbridge Value Trust 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.

Pair Trading with Allianzgi Convertible and Clearbridge Value

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

The idea behind Allianzgi Convertible Income and Clearbridge Value Trust 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.