Correlation Between Guidemark Smallmid and Allianzgi Global

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

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

Diversification Opportunities for Guidemark Smallmid and Allianzgi Global

0.01

Correlation Coefficient

Guidemark Smallmid  Allianzgi Global

Significant diversification

The 3 months correlation between Guidemark and Allianzgi is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Smallmid Cap and Allianzgi Global Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Global Water and Guidemark Smallmid 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 Guidemark Smallmid Cap are associated (or correlated) with Allianzgi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Global Water has no effect on the direction of Guidemark Smallmid i.e., Guidemark Smallmid and Allianzgi Global go up and down completely randomly.

Pair Corralation between Guidemark Smallmid and Allianzgi Global

Assuming the 90 days horizon Guidemark Smallmid Cap is expected to generate 0.75 times more return on investment than Allianzgi Global. However, Guidemark Smallmid Cap is 1.34 times less risky than Allianzgi Global. It trades about 0.05 of its potential returns per unit of risk. Allianzgi Global Water is currently generating about -0.17 per unit of risk. If you would invest  2,106  in Guidemark Smallmid Cap on September 26, 2024 and sell it today you would earn a total of  50.00  from holding Guidemark Smallmid Cap or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Guidemark Smallmid Cap  vs.  Allianzgi Global Water

Guidemark Smallmid Cap

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Smallmid Cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Guidemark Smallmid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Allianzgi Global Water

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Global Water 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 forward 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 Guidemark Smallmid and Allianzgi Global

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

The idea behind Guidemark Smallmid Cap and Allianzgi Global Water 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.