Correlation Between Allianzgi Diversified and Capital World

Can any of the company-specific risk be diversified away by investing in both Allianzgi Diversified and Capital World 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 Diversified and Capital World into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Diversified Income and Capital World Bond, you can compare the effects of market volatilities on Allianzgi Diversified and Capital World 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 Diversified with a short position of Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Diversified and Capital World.

Diversification Opportunities for Allianzgi Diversified and Capital World

-0.56

Correlation Coefficient

Allianzgi Diversified  Capital World

Excellent diversification

The 3 months correlation between Allianzgi and Capital is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Capital World Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Bond and Allianzgi Diversified 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 Diversified Income are associated (or correlated) with Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Bond has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Capital World go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Capital World

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to generate 2.64 times more return on investment than Capital World. However, Allianzgi Diversified is 2.64 times more volatile than Capital World Bond. It trades about 0.18 of its potential returns per unit of risk. Capital World Bond is currently generating about -0.2 per unit of risk. If you would invest  2,073  in Allianzgi Diversified Income on September 14, 2024 and sell it today you would earn a total of  211.00  from holding Allianzgi Diversified Income or generate 10.18% return on investment over 90 days.

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

Allianzgi Diversified Income  vs.  Capital World Bond

Allianzgi Diversified

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Diversified may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Capital World Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Capital World Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Capital World 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 Diversified and Capital World

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

The idea behind Allianzgi Diversified Income and Capital World Bond 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.