Correlation Between Allianzgi Convertible and Global E
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Global E 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 Global E 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 Global E Portfolio, you can compare the effects of market volatilities on Allianzgi Convertible and Global E 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 Global E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Global E.
Diversification Opportunities for Allianzgi Convertible and Global E
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Allianzgi and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Global E Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global E Portfolio 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 Global E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global E Portfolio has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Global E go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Global E
Assuming the 90 days horizon Allianzgi Convertible is expected to generate 1.63 times less return on investment than Global E. But when comparing it to its historical volatility, Allianzgi Convertible Income is 1.19 times less risky than Global E. It trades about 0.08 of its potential returns per unit of risk. Global E Portfolio is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,424 in Global E Portfolio on September 12, 2024 and sell it today you would earn a total of 770.00 from holding Global E Portfolio or generate 54.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. Global E Portfolio
Performance |
| Timeline |
| Allianzgi Convertible |
| Global E Portfolio |
Allianzgi Convertible and Global E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Global E
The main advantage of trading using opposite Allianzgi Convertible and Global E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Global E 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 E will offset losses from the drop in Global E's long position.The idea behind Allianzgi Convertible Income and Global E 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.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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