Correlation Between Lgm Risk and Allianzgi International
Can any of the company-specific risk be diversified away by investing in both Lgm Risk and Allianzgi International 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 Lgm Risk and Allianzgi International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lgm Risk Managed and Allianzgi International Small Cap, you can compare the effects of market volatilities on Lgm Risk and Allianzgi International 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 Lgm Risk with a short position of Allianzgi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lgm Risk and Allianzgi International.
Diversification Opportunities for Lgm Risk and Allianzgi International
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lgm and Allianzgi is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Lgm Risk Managed and Allianzgi International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi International and Lgm Risk 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 Lgm Risk Managed are associated (or correlated) with Allianzgi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi International has no effect on the direction of Lgm Risk i.e., Lgm Risk and Allianzgi International go up and down completely randomly.
Pair Corralation between Lgm Risk and Allianzgi International
Assuming the 90 days horizon Lgm Risk Managed is expected to generate 0.51 times more return on investment than Allianzgi International. However, Lgm Risk Managed is 1.98 times less risky than Allianzgi International. It trades about 0.15 of its potential returns per unit of risk. Allianzgi International Small Cap is currently generating about 0.05 per unit of risk. If you would invest 1,000.00 in Lgm Risk Managed on September 4, 2024 and sell it today you would earn a total of 151.00 from holding Lgm Risk Managed or generate 15.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lgm Risk Managed vs. Allianzgi International Small
Performance |
| Timeline |
| Lgm Risk Managed |
| Allianzgi International |
Lgm Risk and Allianzgi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lgm Risk and Allianzgi International
The main advantage of trading using opposite Lgm Risk and Allianzgi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lgm Risk position performs unexpectedly, Allianzgi International 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 International will offset losses from the drop in Allianzgi International's long position.| Lgm Risk vs. Fuller Thaler Behavioral | Lgm Risk vs. The Gabelli Small | Lgm Risk vs. Davenport Small Cap | Lgm Risk vs. Northern Small Cap |
| Allianzgi International vs. Lgm Risk Managed | Allianzgi International vs. Guggenheim High Yield | Allianzgi International vs. Ab High Income | Allianzgi International vs. Ab Global Risk |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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