Correlation Between Empiric 2500 and Allianzgi Technology

Can any of the company-specific risk be diversified away by investing in both Empiric 2500 and Allianzgi Technology 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 Empiric 2500 and Allianzgi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Empiric 2500 Fund and Allianzgi Technology Fund, you can compare the effects of market volatilities on Empiric 2500 and Allianzgi Technology 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 Empiric 2500 with a short position of Allianzgi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empiric 2500 and Allianzgi Technology.

Diversification Opportunities for Empiric 2500 and Allianzgi Technology

0.89

Correlation Coefficient

Empiric 2500  Allianzgi Technology

Very poor diversification

The 3 months correlation between Empiric and Allianzgi is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Empiric 2500 Fund and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology and Empiric 2500 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 Empiric 2500 Fund are associated (or correlated) with Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of Empiric 2500 i.e., Empiric 2500 and Allianzgi Technology go up and down completely randomly.

Pair Corralation between Empiric 2500 and Allianzgi Technology

Assuming the 90 days horizon Empiric 2500 is expected to generate 1.99 times less return on investment than Allianzgi Technology. But when comparing it to its historical volatility, Empiric 2500 Fund is 1.27 times less risky than Allianzgi Technology. It trades about 0.13 of its potential returns per unit of risk. Allianzgi Technology Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  8,094  in Allianzgi Technology Fund on September 16, 2024 and sell it today you would earn a total of  1,339  from holding Allianzgi Technology Fund or generate 16.54% return on investment over 90 days.

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

Empiric 2500 Fund  vs.  Allianzgi Technology Fund

Empiric 2500

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Empiric 2500 Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Empiric 2500 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Allianzgi Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 15 (%) 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.

Pair Trading with Empiric 2500 and Allianzgi Technology

The main advantage of trading using opposite Empiric 2500 and Allianzgi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empiric 2500 position performs unexpectedly, Allianzgi Technology 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 Technology will offset losses from the drop in Allianzgi Technology's long position.

The idea behind Empiric 2500 Fund and Allianzgi Technology Fund 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.