Correlation Between American Mutual and Allianzgi Convertible
Can any of the company-specific risk be diversified away by investing in both American Mutual 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 American Mutual and Allianzgi Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Allianzgi Vertible Fund, you can compare the effects of market volatilities on American Mutual 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 American Mutual with a short position of Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Allianzgi Convertible.
Diversification Opportunities for American Mutual and Allianzgi Convertible
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Allianzgi is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Allianzgi Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and American Mutual 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 American Mutual Fund 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 American Mutual i.e., American Mutual and Allianzgi Convertible go up and down completely randomly.
Pair Corralation between American Mutual and Allianzgi Convertible
Assuming the 90 days horizon American Mutual is expected to generate 1.01 times less return on investment than Allianzgi Convertible. But when comparing it to its historical volatility, American Mutual Fund is 1.01 times less risky than Allianzgi Convertible. It trades about 0.18 of its potential returns per unit of risk. Allianzgi Vertible Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,804 in Allianzgi Vertible Fund on August 26, 2024 and sell it today you would earn a total of 888.00 from holding Allianzgi Vertible Fund or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Allianzgi Vertible Fund
Performance |
| Timeline |
| American Mutual |
| Allianzgi Convertible |
American Mutual and Allianzgi Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Allianzgi Convertible
The main advantage of trading using opposite American Mutual and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual 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.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Allianzgi Convertible vs. Morgan Stanley Multi | Allianzgi Convertible vs. Allianzgi Income Growth | Allianzgi Convertible vs. Stocksplus Total Return | Allianzgi Convertible vs. Lord Abbett Micro Cap |
Check out your portfolio center.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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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