Correlation Between Allianzgi Convertible and International Equity
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Allianzgi Convertible Income vs. International Equity Index
Performance |
Timeline |
Allianzgi Convertible |
International Equity |
Allianzgi Convertible and International Equity Volatility Contrast
Predicted Return Density |
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.Allianzgi Convertible vs. Leader Short Term Bond | ||
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Check out your portfolio center.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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