Correlation Between Visa and Allianzgi Mid-cap

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

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

Diversification Opportunities for Visa and Allianzgi Mid-cap

0.77

Correlation Coefficient

Visa  Allianzgi Mid-cap

Poor diversification

The 3 months correlation between Visa and Allianzgi is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A 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 Visa 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 Visa Class A are associated (or correlated) with Allianzgi Mid-cap. 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 Visa i.e., Visa and Allianzgi Mid-cap go up and down completely randomly.

Pair Corralation between Visa and Allianzgi Mid-cap

Taking into account the 90-day investment horizon Visa is expected to generate 1.21 times less return on investment than Allianzgi Mid-cap. But when comparing it to its historical volatility, Visa Class A is 1.07 times less risky than Allianzgi Mid-cap. It trades about 0.08 of its potential returns per unit of risk. Allianzgi Mid Cap Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  306.00  in Allianzgi Mid Cap Fund on August 31, 2024 and sell it today you would earn a total of  180.00  from holding Allianzgi Mid Cap Fund or generate 58.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Visa Class A  vs.  Allianzgi Mid Cap Fund

Visa Class A

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Visa showed solid returns over the last few months and may actually be approaching a breakup point.

Allianzgi Mid Cap

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Mid Cap Fund are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Mid-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Visa and Allianzgi Mid-cap

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

The idea behind Visa Class A 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.