Correlation Between Allianzgi Technology and Global Technology
Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Allianzgi Technology and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and Global Technology.
Diversification Opportunities for Allianzgi Technology and Global Technology
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allianzgi and Global is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Global Technology go up and down completely randomly.
Pair Corralation between Allianzgi Technology and Global Technology
Assuming the 90 days horizon Allianzgi Technology Fund is expected to generate 1.14 times more return on investment than Global Technology. However, Allianzgi Technology is 1.14 times more volatile than Global Technology Portfolio. It trades about 0.09 of its potential returns per unit of risk. Global Technology Portfolio is currently generating about 0.1 per unit of risk. If you would invest 762.00 in Allianzgi Technology Fund on November 27, 2024 and sell it today you would earn a total of 577.00 from holding Allianzgi Technology Fund or generate 75.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Technology Fund vs. Global Technology Portfolio
Performance |
| Timeline |
| Allianzgi Technology |
| Global Technology |
Allianzgi Technology and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Technology and Global Technology
The main advantage of trading using opposite Allianzgi Technology and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Technology position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.The idea behind Allianzgi Technology Fund and Global Technology Portfolio 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.
| Global Technology vs. Firsthand Technology Opportunities | Global Technology vs. Invesco Technology Fund | Global Technology vs. Mfs Technology Fund | Global Technology vs. Technology Ultrasector Profund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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