Correlation Between Dimensional International and AllianzIM Equity
Can any of the company-specific risk be diversified away by investing in both Dimensional International and AllianzIM Equity 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 Dimensional International and AllianzIM Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dimensional International High and AllianzIM Equity Buffer15, you can compare the effects of market volatilities on Dimensional International and AllianzIM Equity 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 Dimensional International with a short position of AllianzIM Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dimensional International and AllianzIM Equity.
Diversification Opportunities for Dimensional International and AllianzIM Equity
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dimensional and AllianzIM is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Dimensional International High and AllianzIM Equity Buffer15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianzIM Equity Buffer15 and Dimensional 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 Dimensional International High are associated (or correlated) with AllianzIM Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianzIM Equity Buffer15 has no effect on the direction of Dimensional International i.e., Dimensional International and AllianzIM Equity go up and down completely randomly.
Pair Corralation between Dimensional International and AllianzIM Equity
Given the investment horizon of 90 days Dimensional International is expected to generate 2.61 times less return on investment than AllianzIM Equity. In addition to that, Dimensional International is 1.59 times more volatile than AllianzIM Equity Buffer15. It trades about 0.05 of its total potential returns per unit of risk. AllianzIM Equity Buffer15 is currently generating about 0.19 per unit of volatility. If you would invest 2,464 in AllianzIM Equity Buffer15 on August 29, 2024 and sell it today you would earn a total of 155.00 from holding AllianzIM Equity Buffer15 or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.53% |
| Values | Daily Returns |
Dimensional International High vs. AllianzIM Equity Buffer15
Performance |
| Timeline |
| Dimensional International |
| AllianzIM Equity Buffer15 |
Dimensional International and AllianzIM Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dimensional International and AllianzIM Equity
The main advantage of trading using opposite Dimensional International and AllianzIM Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dimensional International position performs unexpectedly, AllianzIM Equity 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 AllianzIM Equity will offset losses from the drop in AllianzIM Equity's long position.The idea behind Dimensional International High and AllianzIM Equity Buffer15 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.
| AllianzIM Equity vs. FT Vest Equity | AllianzIM Equity vs. Northern Lights | AllianzIM Equity vs. Dimensional International High | AllianzIM Equity vs. First Trust Exchange Traded |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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