Correlation Between Allianzgi Convertible and Allianzgi Mid-cap

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

By analyzing existing cross correlation between Allianzgi Vertible Fund and Allianzgi Mid Cap Fund, you can compare the effects of market volatilities on Allianzgi Convertible and Allianzgi Mid-cap 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 Allianzgi Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Allianzgi Mid-cap.

Diversification Opportunities for Allianzgi Convertible and Allianzgi Mid-cap

0.98

Correlation Coefficient

Allianzgi Convertible  Allianzgi Mid-cap

Almost no diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Vertible Fund and Allianzgi Mid Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Mid Cap 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 Vertible Fund are associated (or correlated) with Allianzgi Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Mid Cap has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Allianzgi Mid-cap go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Allianzgi Mid-cap

Assuming the 90 days horizon Allianzgi Convertible is expected to generate 1.49 times less return on investment than Allianzgi Mid-cap. But when comparing it to its historical volatility, Allianzgi Vertible Fund is 1.82 times less risky than Allianzgi Mid-cap. It trades about 0.36 of its potential returns per unit of risk. Allianzgi Mid Cap Fund is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  404.00  in Allianzgi Mid Cap Fund on August 31, 2024 and sell it today you would earn a total of  79.00  from holding Allianzgi Mid Cap Fund or generate 19.55% return on investment over 90 days.

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

Allianzgi Vertible Fund  vs.  Allianzgi Mid Cap Fund

Allianzgi Convertible

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Vertible Fund are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Allianzgi Convertible may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Allianzgi Mid Cap

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Mid-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi Convertible and Allianzgi Mid-cap

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

The idea behind Allianzgi Vertible Fund and Allianzgi Mid Cap Fund 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.