Correlation Between VHAI and Allianzgi Technology

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

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

Diversification Opportunities for VHAI and Allianzgi Technology

-0.73

Correlation Coefficient

VHAI  Allianzgi Technology

Pay attention - limited upside

The 3 months correlation between VHAI and Allianzgi is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology and VHAI 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 VHAI are associated (or correlated) with Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of VHAI i.e., VHAI and Allianzgi Technology go up and down completely randomly.

Pair Corralation between VHAI and Allianzgi Technology

Given the investment horizon of 90 days VHAI is expected to under-perform the Allianzgi Technology. In addition to that, VHAI is 8.59 times more volatile than Allianzgi Technology Fund. It trades about -0.12 of its total potential returns per unit of risk. Allianzgi Technology Fund is currently generating about 0.28 per unit of volatility. If you would invest  5,812  in Allianzgi Technology Fund on September 1, 2024 and sell it today you would earn a total of  426.00  from holding Allianzgi Technology Fund or generate 7.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

VHAI  vs.  Allianzgi Technology Fund

VHAI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Allianzgi Technology

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with VHAI and Allianzgi Technology

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

The idea behind VHAI and Allianzgi Technology 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 Transaction History module to view history of all your transactions and understand their impact on performance.