Correlation Between Allianzgi Technology and Cboe Vest

Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and Cboe Vest 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 Cboe Vest 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 Cboe Vest Bitcoin, you can compare the effects of market volatilities on Allianzgi Technology and Cboe Vest 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 Cboe Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and Cboe Vest.

Diversification Opportunities for Allianzgi Technology and Cboe Vest

0.9

Correlation Coefficient

Allianzgi Technology  Cboe Vest

Almost no diversification

The 3 months correlation between Allianzgi and Cboe is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Cboe Vest Bitcoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe Vest Bitcoin 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 Cboe Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe Vest Bitcoin has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Cboe Vest go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Cboe Vest

Assuming the 90 days horizon Allianzgi Technology is expected to generate 3.12 times less return on investment than Cboe Vest. But when comparing it to its historical volatility, Allianzgi Technology Fund is 2.34 times less risky than Cboe Vest. It trades about 0.21 of its potential returns per unit of risk. Cboe Vest Bitcoin is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  1,987  in Cboe Vest Bitcoin on September 18, 2024 and sell it today you would earn a total of  1,200  from holding Cboe Vest Bitcoin or generate 60.39% return on investment over 90 days.

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

Allianzgi Technology Fund  vs.  Cboe Vest Bitcoin

Allianzgi Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 16 (%) 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.

Cboe Vest Bitcoin

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cboe Vest Bitcoin are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Cboe Vest showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianzgi Technology and Cboe Vest

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

The idea behind Allianzgi Technology Fund and Cboe Vest Bitcoin 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.