Correlation Between Allianzgi Convertible and Guidepath Managed
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Guidepath Managed 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 Guidepath Managed 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 Guidepath Managed Futures, you can compare the effects of market volatilities on Allianzgi Convertible and Guidepath Managed 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 Guidepath Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Guidepath Managed.
Diversification Opportunities for Allianzgi Convertible and Guidepath Managed
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allianzgi and Guidepath is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures 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 Guidepath Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Guidepath Managed go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Guidepath Managed
Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 0.89 times more return on investment than Guidepath Managed. However, Allianzgi Convertible Income is 1.12 times less risky than Guidepath Managed. It trades about 0.18 of its potential returns per unit of risk. Guidepath Managed Futures is currently generating about -0.08 per unit of risk. If you would invest 349.00 in Allianzgi Convertible Income on September 13, 2024 and sell it today you would earn a total of 53.00 from holding Allianzgi Convertible Income or generate 15.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. Guidepath Managed Futures
Performance |
| Timeline |
| Allianzgi Convertible |
| Guidepath Managed Futures |
Allianzgi Convertible and Guidepath Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Guidepath Managed
The main advantage of trading using opposite Allianzgi Convertible and Guidepath Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Guidepath Managed 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 Guidepath Managed will offset losses from the drop in Guidepath Managed's long position.The idea behind Allianzgi Convertible Income and Guidepath Managed Futures 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.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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