Correlation Between American Funds and Virtus AllianzGI
Can any of the company-specific risk be diversified away by investing in both American Funds and Virtus AllianzGI 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 Funds and Virtus AllianzGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Fundamental and Virtus AllianzGI Convertible, you can compare the effects of market volatilities on American Funds and Virtus AllianzGI 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 Funds with a short position of Virtus AllianzGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Virtus AllianzGI.
Diversification Opportunities for American Funds and Virtus AllianzGI
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Virtus is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Fundamental and Virtus AllianzGI Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus AllianzGI Con and American Funds 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 Funds Fundamental are associated (or correlated) with Virtus AllianzGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus AllianzGI Con has no effect on the direction of American Funds i.e., American Funds and Virtus AllianzGI go up and down completely randomly.
Pair Corralation between American Funds and Virtus AllianzGI
Assuming the 90 days horizon American Funds Fundamental is expected to generate 1.48 times more return on investment than Virtus AllianzGI. However, American Funds is 1.48 times more volatile than Virtus AllianzGI Convertible. It trades about 0.06 of its potential returns per unit of risk. Virtus AllianzGI Convertible is currently generating about 0.03 per unit of risk. If you would invest 7,352 in American Funds Fundamental on November 3, 2024 and sell it today you would earn a total of 1,066 from holding American Funds Fundamental or generate 14.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
American Funds Fundamental vs. Virtus AllianzGI Convertible
Performance |
| Timeline |
| American Funds Funda |
| Virtus AllianzGI Con |
American Funds and Virtus AllianzGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Virtus AllianzGI
The main advantage of trading using opposite American Funds and Virtus AllianzGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Virtus AllianzGI 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 Virtus AllianzGI will offset losses from the drop in Virtus AllianzGI's long position.| American Funds vs. World Energy Fund | American Funds vs. Energy Services Fund | American Funds vs. Alpsalerian Energy Infrastructure | American Funds vs. Icon Natural Resources |
| Virtus AllianzGI vs. The Gabelli Equity | Virtus AllianzGI vs. The Gabelli Equity | Virtus AllianzGI vs. Oxford Lane Capital | Virtus AllianzGI vs. The Gabelli Utility |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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