Correlation Between Allianzgi Convertible and Pace Municipal
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Pace Municipal 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 Pace Municipal 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 Pace Municipal Fixed, you can compare the effects of market volatilities on Allianzgi Convertible and Pace Municipal 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 Pace Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Pace Municipal.
Diversification Opportunities for Allianzgi Convertible and Pace Municipal
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allianzgi and Pace is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Pace Municipal Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Municipal Fixed 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 Pace Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Municipal Fixed has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Pace Municipal go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Pace Municipal
Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 2.4 times more return on investment than Pace Municipal. However, Allianzgi Convertible is 2.4 times more volatile than Pace Municipal Fixed. It trades about 0.67 of its potential returns per unit of risk. Pace Municipal Fixed is currently generating about 0.17 per unit of risk. If you would invest 375.00 in Allianzgi Convertible Income on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Allianzgi Convertible Income or generate 8.8% 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. Pace Municipal Fixed
Performance |
| Timeline |
| Allianzgi Convertible |
| Pace Municipal Fixed |
Allianzgi Convertible and Pace Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Pace Municipal
The main advantage of trading using opposite Allianzgi Convertible and Pace Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Pace Municipal 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 Pace Municipal will offset losses from the drop in Pace Municipal's long position.| Allianzgi Convertible vs. Vanguard Total Stock | Allianzgi Convertible vs. Vanguard 500 Index | Allianzgi Convertible vs. Vanguard Total Stock | Allianzgi Convertible vs. Vanguard Total Stock |
| Pace Municipal vs. Lord Abbett Convertible | Pace Municipal vs. Virtus Convertible | Pace Municipal vs. Allianzgi Convertible Income | Pace Municipal vs. Absolute Convertible Arbitrage |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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