Correlation Between Allianzgi Technology and Smallcap World
Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and Smallcap World 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 Technology and Smallcap World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi Technology Fund and Smallcap World Fund, you can compare the effects of market volatilities on Allianzgi Technology and Smallcap World 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 Technology with a short position of Smallcap World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and Smallcap World.
Diversification Opportunities for Allianzgi Technology and Smallcap World
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianzgi and Smallcap is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Smallcap World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap World and Allianzgi Technology 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 Technology Fund are associated (or correlated) with Smallcap World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap World has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Smallcap World go up and down completely randomly.
Pair Corralation between Allianzgi Technology and Smallcap World
Assuming the 90 days horizon Allianzgi Technology Fund is expected to generate 1.6 times more return on investment than Smallcap World. However, Allianzgi Technology is 1.6 times more volatile than Smallcap World Fund. It trades about 0.09 of its potential returns per unit of risk. Smallcap World Fund is currently generating about 0.05 per unit of risk. If you would invest 5,686 in Allianzgi Technology Fund on August 31, 2024 and sell it today you would earn a total of 3,211 from holding Allianzgi Technology Fund or generate 56.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Technology Fund vs. Smallcap World Fund
Performance |
| Timeline |
| Allianzgi Technology |
| Smallcap World |
Allianzgi Technology and Smallcap World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Technology and Smallcap World
The main advantage of trading using opposite Allianzgi Technology and Smallcap World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Technology position performs unexpectedly, Smallcap World 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 Smallcap World will offset losses from the drop in Smallcap World's long position.| Allianzgi Technology vs. Goldman Sachs Strategic | Allianzgi Technology vs. Red Oak Technology | Allianzgi Technology vs. Kinetics Internet Fund | Allianzgi Technology vs. Tomorrows Scholar College |
| Smallcap World vs. Goldman Sachs Technology | Smallcap World vs. Allianzgi Technology Fund | Smallcap World vs. Icon Information Technology | Smallcap World vs. Biotechnology Fund Class |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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