Correlation Between Allianzgi Convertible and American Funds
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and American Funds 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 Convertible and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianzgi Convertible Income and American Funds Capital, you can compare the effects of market volatilities on Allianzgi Convertible and American Funds 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 Convertible with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and American Funds.
Diversification Opportunities for Allianzgi Convertible and American Funds
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Allianzgi and American is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and American Funds Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Capital and Allianzgi Convertible 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 Convertible Income are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Capital has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and American Funds go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and American Funds
Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 1.46 times more return on investment than American Funds. However, Allianzgi Convertible is 1.46 times more volatile than American Funds Capital. It trades about 0.1 of its potential returns per unit of risk. American Funds Capital is currently generating about 0.12 per unit of risk. If you would invest 323.00 in Allianzgi Convertible Income on September 12, 2024 and sell it today you would earn a total of 83.00 from holding Allianzgi Convertible Income or generate 25.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. American Funds Capital
Performance |
| Timeline |
| Allianzgi Convertible |
| American Funds Capital |
Allianzgi Convertible and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and American Funds
The main advantage of trading using opposite Allianzgi Convertible and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.The idea behind Allianzgi Convertible Income and American Funds Capital 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.
| American Funds vs. Allianzgi Convertible Income | American Funds vs. Fidelity Sai Convertible | American Funds vs. Absolute Convertible Arbitrage | American Funds vs. Rationalpier 88 Convertible |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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