Correlation Between Small Cap and Allianzgi Mid-cap
Can any of the company-specific risk be diversified away by investing in both Small Cap and Allianzgi Mid-cap 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 Small Cap and Allianzgi Mid-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Equity and Allianzgi Mid Cap Fund, you can compare the effects of market volatilities on Small Cap and Allianzgi Mid-cap 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 Small Cap with a short position of Allianzgi Mid-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Allianzgi Mid-cap.
Diversification Opportunities for Small Cap and Allianzgi Mid-cap
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Small and Allianzgi is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Equity and Allianzgi Mid Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Mid Cap and Small Cap 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 Small Cap Equity are associated (or correlated) with Allianzgi Mid-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Mid Cap has no effect on the direction of Small Cap i.e., Small Cap and Allianzgi Mid-cap go up and down completely randomly.
Pair Corralation between Small Cap and Allianzgi Mid-cap
Assuming the 90 days horizon Small Cap is expected to generate 1.3 times less return on investment than Allianzgi Mid-cap. But when comparing it to its historical volatility, Small Cap Equity is 1.22 times less risky than Allianzgi Mid-cap. It trades about 0.19 of its potential returns per unit of risk. Allianzgi Mid Cap Fund is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 457.00 in Allianzgi Mid Cap Fund on October 20, 2024 and sell it today you would earn a total of 20.00 from holding Allianzgi Mid Cap Fund or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Equity vs. Allianzgi Mid Cap Fund
Performance |
| Timeline |
| Small Cap Equity |
| Allianzgi Mid Cap |
Small Cap and Allianzgi Mid-cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Allianzgi Mid-cap
The main advantage of trading using opposite Small Cap and Allianzgi Mid-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Allianzgi Mid-cap 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 Mid-cap will offset losses from the drop in Allianzgi Mid-cap's long position.| Small Cap vs. Ab Bond Inflation | Small Cap vs. Ab Bond Inflation | Small Cap vs. Ab Bond Inflation | Small Cap vs. Arrow Managed Futures |
| Allianzgi Mid-cap vs. Locorr Dynamic Equity | Allianzgi Mid-cap vs. Ab Select Equity | Allianzgi Mid-cap vs. Siit Equity Factor | Allianzgi Mid-cap vs. Small Cap Equity |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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