Correlation Between Allianzgi Technology and Large Cap

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

Diversification Opportunities for Allianzgi Technology and Large Cap

0.15

Correlation Coefficient

Allianzgi Technology  Large Cap

Average diversification

The 3 months correlation between Allianzgi and Large is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Large Cap Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Value 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 Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Value has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Large Cap go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Large Cap

Assuming the 90 days horizon Allianzgi Technology Fund is expected to generate 0.44 times more return on investment than Large Cap. However, Allianzgi Technology Fund is 2.27 times less risky than Large Cap. It trades about 0.18 of its potential returns per unit of risk. Large Cap Value is currently generating about -0.09 per unit of risk. If you would invest  8,123  in Allianzgi Technology Fund on September 13, 2024 and sell it today you would earn a total of  1,103  from holding Allianzgi Technology Fund or generate 13.58% return on investment over 90 days.

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

Allianzgi Technology Fund  vs.  Large Cap Value

Allianzgi Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 13 (%) 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.

Large Cap Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Large Cap Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Allianzgi Technology and Large Cap

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

The idea behind Allianzgi Technology Fund and Large Cap Value 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..