Correlation Between Allianzgi Emerging and Allianzgi Global

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

By analyzing existing cross correlation between Allianzgi Emerging Markets and Allianzgi Global Sustainability, you can compare the effects of market volatilities on Allianzgi Emerging and Allianzgi Global 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 Emerging with a short position of Allianzgi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Emerging and Allianzgi Global.

Diversification Opportunities for Allianzgi Emerging and Allianzgi Global

0.82

Correlation Coefficient

Allianzgi Emerging  Allianzgi Global

Very poor diversification

The 3 months correlation between Allianzgi and Allianzgi is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Emerging Markets and Allianzgi Global Sustainabilit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Sus and Allianzgi Emerging 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 Emerging Markets are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global Sus has no effect on the direction of Allianzgi Emerging i.e., Allianzgi Emerging and Allianzgi Global go up and down completely randomly.

Pair Corralation between Allianzgi Emerging and Allianzgi Global

Assuming the 90 days horizon Allianzgi Emerging is expected to generate 18.41 times less return on investment than Allianzgi Global. In addition to that, Allianzgi Emerging is 1.1 times more volatile than Allianzgi Global Sustainability. It trades about 0.0 of its total potential returns per unit of risk. Allianzgi Global Sustainability is currently generating about 0.04 per unit of volatility. If you would invest  1,408  in Allianzgi Global Sustainability on September 3, 2024 and sell it today you would earn a total of  26.00  from holding Allianzgi Global Sustainability or generate 1.85% return on investment over 90 days.

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

Allianzgi Emerging Markets  vs.  Allianzgi Global Sustainabilit

Allianzgi Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Global Sus

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Global Sustainability are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Global 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 Emerging and Allianzgi Global

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

The idea behind Allianzgi Emerging Markets and Allianzgi Global Sustainability 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.