Correlation Between Phenixfin and Allianzgi Convertible

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

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

Diversification Opportunities for Phenixfin and Allianzgi Convertible

0.2

Correlation Coefficient

Phenixfin  Allianzgi Convertible

Modest diversification

The 3 months correlation between Phenixfin and Allianzgi is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Phenixfin and Allianzgi Convertible Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Phenixfin 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 Phenixfin 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 Phenixfin i.e., Phenixfin and Allianzgi Convertible go up and down completely randomly.

Pair Corralation between Phenixfin and Allianzgi Convertible

Considering the 90-day investment horizon Phenixfin is expected to generate 105.45 times more return on investment than Allianzgi Convertible. However, Phenixfin is 105.45 times more volatile than Allianzgi Convertible Income. It trades about 0.12 of its potential returns per unit of risk. Allianzgi Convertible Income is currently generating about 0.14 per unit of risk. If you would invest  4,500  in Phenixfin on September 2, 2024 and sell it today you would earn a total of  225.00  from holding Phenixfin or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	91.27%
Values	Daily Returns

Phenixfin  vs.  Allianzgi Convertible Income

Phenixfin

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Phenixfin are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Phenixfin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 Phenixfin and Allianzgi Convertible

The main advantage of trading using opposite Phenixfin and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phenixfin 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 Phenixfin 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.