Correlation Between Fabxx and Allianzgi Mid

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

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

Diversification Opportunities for Fabxx and Allianzgi Mid

-0.49

Correlation Coefficient

Fabxx  Allianzgi Mid

Very good diversification

The 3 months correlation between Fabxx and Allianzgi is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Fabxx and Allianzgi Mid Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Mid Cap and Fabxx 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 Fabxx are associated (or correlated) with Allianzgi Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Mid Cap has no effect on the direction of Fabxx i.e., Fabxx and Allianzgi Mid go up and down completely randomly.

Pair Corralation between Fabxx and Allianzgi Mid

Assuming the 90 days horizon Fabxx is expected to under-perform the Allianzgi Mid. In addition to that, Fabxx is 4.6 times more volatile than Allianzgi Mid Cap Fund. It trades about -0.03 of its total potential returns per unit of risk. Allianzgi Mid Cap Fund is currently generating about 0.08 per unit of volatility. If you would invest  360.00  in Allianzgi Mid Cap Fund on September 12, 2024 and sell it today you would earn a total of  118.00  from holding Allianzgi Mid Cap Fund or generate 32.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.2%
Values	Daily Returns

Fabxx  vs.  Allianzgi Mid Cap Fund

Fabxx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fabxx 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 basic 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.

Allianzgi Mid Cap

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Mid showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fabxx and Allianzgi Mid

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

The idea behind Fabxx and Allianzgi Mid Cap 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.