Correlation Between Absolute Convertible and Allianzgi Convertible
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Allianzgi Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Allianzgi Vertible Fund, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Allianzgi Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Allianzgi Convertible.
Diversification Opportunities for Absolute Convertible and Allianzgi Convertible
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Absolute and ALLIANZGI is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Allianzgi Vertible Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Convertible and Absolute Convertible 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 Absolute Convertible Arbitrage 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 Absolute Convertible i.e., Absolute Convertible and Allianzgi Convertible go up and down completely randomly.
Pair Corralation between Absolute Convertible and Allianzgi Convertible
Assuming the 90 days horizon Absolute Convertible is expected to generate 16.17 times less return on investment than Allianzgi Convertible. But when comparing it to its historical volatility, Absolute Convertible Arbitrage is 14.07 times less risky than Allianzgi Convertible. It trades about 0.44 of its potential returns per unit of risk. Allianzgi Vertible Fund is currently generating about 0.51 of returns per unit of risk over similar time horizon. If you would invest 3,610 in Allianzgi Vertible Fund on August 28, 2024 and sell it today you would earn a total of 262.00 from holding Allianzgi Vertible Fund or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Allianzgi Vertible Fund
Performance |
| Timeline |
| Absolute Convertible |
| Allianzgi Convertible |
Absolute Convertible and Allianzgi Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Allianzgi Convertible
The main advantage of trading using opposite Absolute Convertible and Allianzgi Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Absolute Capital Opportunities | Absolute Convertible vs. Invesco Small Cap | Absolute Convertible vs. Vanguard 500 Index | Absolute Convertible vs. Rivernorth Opportunities |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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