Correlation Between Allianzgi Convertible and Jhancock Multi
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Jhancock Multi 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 Jhancock Multi 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 Jhancock Multi Index 2065, you can compare the effects of market volatilities on Allianzgi Convertible and Jhancock Multi 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 Jhancock Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Jhancock Multi.
Diversification Opportunities for Allianzgi Convertible and Jhancock Multi
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianzgi and Jhancock is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Jhancock Multi Index 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jhancock Multi Index 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 Jhancock Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jhancock Multi Index has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Jhancock Multi go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Jhancock Multi
Assuming the 90 days horizon Allianzgi Convertible is expected to generate 1.6 times less return on investment than Jhancock Multi. In addition to that, Allianzgi Convertible is 1.06 times more volatile than Jhancock Multi Index 2065. It trades about 0.07 of its total potential returns per unit of risk. Jhancock Multi Index 2065 is currently generating about 0.11 per unit of volatility. If you would invest 1,428 in Jhancock Multi Index 2065 on November 7, 2024 and sell it today you would earn a total of 24.00 from holding Jhancock Multi Index 2065 or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. Jhancock Multi Index 2065
Performance |
| Timeline |
| Allianzgi Convertible |
| Jhancock Multi Index |
Allianzgi Convertible and Jhancock Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Jhancock Multi
The main advantage of trading using opposite Allianzgi Convertible and Jhancock Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Jhancock Multi 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 Jhancock Multi will offset losses from the drop in Jhancock Multi's long position.The idea behind Allianzgi Convertible Income and Jhancock Multi Index 2065 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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