Correlation Between Barings Participation and Allianzgi Equity

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Can any of the company-specific risk be diversified away by investing in both Barings Participation and Allianzgi Equity 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 Barings Participation and Allianzgi Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Participation Investors and Allianzgi Equity Convertible, you can compare the effects of market volatilities on Barings Participation and Allianzgi Equity 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 Barings Participation with a short position of Allianzgi Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Participation and Allianzgi Equity.

Diversification Opportunities for Barings Participation and Allianzgi Equity

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Barings and Allianzgi is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Barings Participation Investor and Allianzgi Equity Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Equity Con and Barings Participation 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 Barings Participation Investors are associated (or correlated) with Allianzgi Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Equity Con has no effect on the direction of Barings Participation i.e., Barings Participation and Allianzgi Equity go up and down completely randomly.

Pair Corralation between Barings Participation and Allianzgi Equity

Considering the 90-day investment horizon Barings Participation is expected to generate 1.81 times less return on investment than Allianzgi Equity. But when comparing it to its historical volatility, Barings Participation Investors is 1.01 times less risky than Allianzgi Equity. It trades about 0.12 of its potential returns per unit of risk. Allianzgi Equity Convertible is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  2,253  in Allianzgi Equity Convertible on September 13, 2024 and sell it today you would earn a total of  240.00  from holding Allianzgi Equity Convertible or generate 10.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Barings Participation Investor  vs.  Allianzgi Equity Convertible

 Performance 
       Timeline  
Barings Participation 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Barings Participation Investors are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Barings Participation is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Allianzgi Equity Con 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Equity Convertible are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather inconsistent forward indicators, Allianzgi Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Barings Participation and Allianzgi Equity Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Barings Participation and Allianzgi Equity

The main advantage of trading using opposite Barings Participation and Allianzgi Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Participation position performs unexpectedly, Allianzgi Equity 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 Equity will offset losses from the drop in Allianzgi Equity's long position.
The idea behind Barings Participation Investors and Allianzgi Equity Convertible 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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