Correlation Between Allianzgi Technology and Blackrock Midcap

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

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

Diversification Opportunities for Allianzgi Technology and Blackrock Midcap

0.4

Correlation Coefficient

Allianzgi Technology  Blackrock Midcap

Very weak diversification

The 3 months correlation between Allianzgi and Blackrock is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Blackrock Midcap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Midcap Index and Allianzgi Technology 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 Technology Fund are associated (or correlated) with Blackrock Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Midcap Index has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Blackrock Midcap go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Blackrock Midcap

Assuming the 90 days horizon Allianzgi Technology Fund is expected to generate 1.1 times more return on investment than Blackrock Midcap. However, Allianzgi Technology is 1.1 times more volatile than Blackrock Midcap Index. It trades about 0.19 of its potential returns per unit of risk. Blackrock Midcap Index is currently generating about -0.06 per unit of risk. If you would invest  8,352  in Allianzgi Technology Fund on September 21, 2024 and sell it today you would earn a total of  1,227  from holding Allianzgi Technology Fund or generate 14.69% return on investment over 90 days.

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

Allianzgi Technology Fund  vs.  Blackrock Midcap Index

Allianzgi Technology

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Blackrock Midcap Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Midcap Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Blackrock Midcap 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 Technology and Blackrock Midcap

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

The idea behind Allianzgi Technology Fund and Blackrock Midcap Index 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.