Correlation Between Voya Asia and Allianzgi Convertible

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

By analyzing existing cross correlation between Voya Asia Pacific and Allianzgi Convertible Income, you can compare the effects of market volatilities on Voya Asia and Allianzgi Convertible 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 Voya Asia with a short position of Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Asia and Allianzgi Convertible.

Diversification Opportunities for Voya Asia and Allianzgi Convertible

0.01

Correlation Coefficient

Voya Asia  Allianzgi Convertible

Significant diversification

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

Pair Corralation between Voya Asia and Allianzgi Convertible

Considering the 90-day investment horizon Voya Asia is expected to generate 135.94 times less return on investment than Allianzgi Convertible. In addition to that, Voya Asia Pacific is as risky as Allianzgi Convertible. It trades about 0.0 of its total potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.19 per unit of volatility. If you would invest  291.00  in Allianzgi Convertible Income on September 3, 2024 and sell it today you would earn a total of  42.00  from holding Allianzgi Convertible Income or generate 14.43% return on investment over 90 days.

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

Voya Asia Pacific  vs.  Allianzgi Convertible Income

Voya Asia Pacific

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Asia Pacific has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Voya Asia is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Allianzgi Convertible

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly abnormal fundamental indicators, Allianzgi Convertible showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Voya Asia and Allianzgi Convertible

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

The idea behind Voya Asia Pacific and Allianzgi Convertible Income 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 Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.