Correlation Between Allianzgi Convertible and International Equity

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

Diversification Opportunities for Allianzgi Convertible and International Equity

AllianzgiInternationalDiversified AwayAllianzgiInternationalDiversified Away100%
0.01
  Correlation Coefficient

Significant diversification

The 3 months correlation between Allianzgi and International is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and International Equity Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Equity 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 International Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Equity has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and International Equity go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and International Equity

Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 0.94 times more return on investment than International Equity. However, Allianzgi Convertible Income is 1.06 times less risky than International Equity. It trades about 0.07 of its potential returns per unit of risk. International Equity Index is currently generating about -0.19 per unit of risk. If you would invest  372.00  in Allianzgi Convertible Income on October 10, 2024 and sell it today you would earn a total of  12.00  from holding Allianzgi Convertible Income or generate 3.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Allianzgi Convertible Income  vs.  International Equity Index

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec 024681012
JavaScript chart by amCharts 3.21.15XNCVX PFIEX
       Timeline  
Allianzgi Convertible 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 5 (%) 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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan3.753.83.853.93.9544.05
International Equity 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days International Equity Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1111.211.411.611.81212.212.4

Allianzgi Convertible and International Equity Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.36-1.77-1.18-0.590.00.61.221.832.453.06 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15XNCVX PFIEX
       Returns  

Pair Trading with Allianzgi Convertible and International Equity

The main advantage of trading using opposite Allianzgi Convertible and International Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, International Equity 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 International Equity will offset losses from the drop in International Equity's long position.
The idea behind Allianzgi Convertible Income and International Equity Index 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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