Correlation Between Dunham Porategovernment and Allianzgi International

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

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

Diversification Opportunities for Dunham Porategovernment and Allianzgi International

0.76

Correlation Coefficient

Dunham Porategovernment  Allianzgi International

Poor diversification

The 3 months correlation between Dunham and Allianzgi is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Dunham Porategovernment Bond and Allianzgi International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi International and Dunham Porategovernment 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 Dunham Porategovernment Bond are associated (or correlated) with Allianzgi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi International has no effect on the direction of Dunham Porategovernment i.e., Dunham Porategovernment and Allianzgi International go up and down completely randomly.

Pair Corralation between Dunham Porategovernment and Allianzgi International

Assuming the 90 days horizon Dunham Porategovernment Bond is expected to under-perform the Allianzgi International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Dunham Porategovernment Bond is 2.36 times less risky than Allianzgi International. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Allianzgi International Small Cap is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,194  in Allianzgi International Small Cap on September 12, 2024 and sell it today you would lose (19.00) from holding Allianzgi International Small Cap or give up 0.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Dunham Porategovernment Bond  vs.  Allianzgi International Small

Dunham Porategovernment

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Dunham Porategovernment and Allianzgi International

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

The idea behind Dunham Porategovernment Bond and Allianzgi International Small 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.