Correlation Between Commonwealth Global and Allianzgi Nfj

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

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

Diversification Opportunities for Commonwealth Global and Allianzgi Nfj

0.55

Correlation Coefficient

Commonwealth Global  Allianzgi Nfj

Very weak diversification

The 3 months correlation between Commonwealth and Allianzgi is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Commonwealth Global Fund and Allianzgi Nfj Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Large and Commonwealth Global 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 Commonwealth Global Fund are associated (or correlated) with Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Large has no effect on the direction of Commonwealth Global i.e., Commonwealth Global and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between Commonwealth Global and Allianzgi Nfj

Assuming the 90 days horizon Commonwealth Global is expected to generate 2.58 times less return on investment than Allianzgi Nfj. In addition to that, Commonwealth Global is 1.04 times more volatile than Allianzgi Nfj Large Cap. It trades about 0.05 of its total potential returns per unit of risk. Allianzgi Nfj Large Cap is currently generating about 0.13 per unit of volatility. If you would invest  2,836  in Allianzgi Nfj Large Cap on August 31, 2024 and sell it today you would earn a total of  158.00  from holding Allianzgi Nfj Large Cap or generate 5.57% return on investment over 90 days.

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

Commonwealth Global Fund  vs.  Allianzgi Nfj Large Cap

Commonwealth Global

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Commonwealth Global Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Commonwealth Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Nfj Large

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Nfj Large Cap are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Allianzgi Nfj is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Commonwealth Global and Allianzgi Nfj

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

The idea behind Commonwealth Global Fund and Allianzgi Nfj Large Cap 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.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.