Correlation Between Allianzgi Diversified and Valic Company

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

Diversification Opportunities for Allianzgi Diversified and Valic Company

0.79

Correlation Coefficient

Allianzgi Diversified  Valic Company

Poor diversification

The 3 months correlation between Allianzgi and Valic is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Diversified Income and Valic Company I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valic Company I 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 Valic Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valic Company I has no effect on the direction of Allianzgi Diversified i.e., Allianzgi Diversified and Valic Company go up and down completely randomly.

Pair Corralation between Allianzgi Diversified and Valic Company

Considering the 90-day investment horizon Allianzgi Diversified Income is expected to generate 5.51 times more return on investment than Valic Company. However, Allianzgi Diversified is 5.51 times more volatile than Valic Company I. It trades about 0.24 of its potential returns per unit of risk. Valic Company I is currently generating about 0.23 per unit of risk. If you would invest  2,220  in Allianzgi Diversified Income on September 12, 2024 and sell it today you would earn a total of  87.00  from holding Allianzgi Diversified Income or generate 3.92% return on investment over 90 days.

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

Allianzgi Diversified Income  vs.  Valic Company I

Allianzgi Diversified

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Diversified Income are ranked lower than 18 (%) 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.

Valic Company I

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Valic Company is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Allianzgi Diversified and Valic Company

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

The idea behind Allianzgi Diversified Income and Valic Company I 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.