Correlation Between Allianzgi International and Allianzgi Emerging
Can any of the company-specific risk be diversified away by investing in both Allianzgi International and Allianzgi Emerging 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 Allianzgi International and Allianzgi Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi International Small Cap and Allianzgi Emerging Markets, you can compare the effects of market volatilities on Allianzgi International and Allianzgi Emerging 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 Allianzgi International with a short position of Allianzgi Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi International and Allianzgi Emerging.
Diversification Opportunities for Allianzgi International and Allianzgi Emerging
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianzgi and Allianzgi is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi International Small and Allianzgi Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Emerging and Allianzgi International 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 Allianzgi International Small Cap are associated (or correlated) with Allianzgi Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Emerging has no effect on the direction of Allianzgi International i.e., Allianzgi International and Allianzgi Emerging go up and down completely randomly.
Pair Corralation between Allianzgi International and Allianzgi Emerging
Assuming the 90 days horizon Allianzgi International Small Cap is expected to generate 0.78 times more return on investment than Allianzgi Emerging. However, Allianzgi International Small Cap is 1.28 times less risky than Allianzgi Emerging. It trades about -0.11 of its potential returns per unit of risk. Allianzgi Emerging Markets is currently generating about -0.21 per unit of risk. If you would invest 2,921 in Allianzgi International Small Cap on August 28, 2024 and sell it today you would lose (41.00) from holding Allianzgi International Small Cap or give up 1.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi International Small vs. Allianzgi Emerging Markets
Performance |
| Timeline |
| Allianzgi International |
| Allianzgi Emerging |
Allianzgi International and Allianzgi Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi International and Allianzgi Emerging
The main advantage of trading using opposite Allianzgi International and Allianzgi Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi International position performs unexpectedly, Allianzgi Emerging 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 Emerging will offset losses from the drop in Allianzgi Emerging's long position.The idea behind Allianzgi International Small Cap and Allianzgi Emerging Markets 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.
| Allianzgi Emerging vs. Allianzgi Nfj International | Allianzgi Emerging vs. Allianzgi Vertible Fund | Allianzgi Emerging vs. Allianzgi Nfj Mid Cap | Allianzgi Emerging vs. Allianzgi Focused Growth |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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