Correlation Between Allianzgi Convertible and Pimco Rae
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Pimco Rae 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 Pimco Rae 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 Pimco Rae Worldwide, you can compare the effects of market volatilities on Allianzgi Convertible and Pimco Rae 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 Pimco Rae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Pimco Rae.
Diversification Opportunities for Allianzgi Convertible and Pimco Rae
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianzgi and Pimco is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Pimco Rae Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Rae Worldwide 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 Pimco Rae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Rae Worldwide has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Pimco Rae go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Pimco Rae
Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 1.74 times more return on investment than Pimco Rae. However, Allianzgi Convertible is 1.74 times more volatile than Pimco Rae Worldwide. It trades about 0.08 of its potential returns per unit of risk. Pimco Rae Worldwide is currently generating about 0.09 per unit of risk. If you would invest 312.00 in Allianzgi Convertible Income on September 12, 2024 and sell it today you would earn a total of 94.00 from holding Allianzgi Convertible Income or generate 30.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. Pimco Rae Worldwide
Performance |
| Timeline |
| Allianzgi Convertible |
| Pimco Rae Worldwide |
Allianzgi Convertible and Pimco Rae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Pimco Rae
The main advantage of trading using opposite Allianzgi Convertible and Pimco Rae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Pimco Rae 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 Pimco Rae will offset losses from the drop in Pimco Rae's long position.The idea behind Allianzgi Convertible Income and Pimco Rae Worldwide 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.
| Pimco Rae vs. Diamond Hill Long Short | Pimco Rae vs. Pimco Rae Worldwide | Pimco Rae vs. SCOR PK | Pimco Rae vs. Morningstar Unconstrained Allocation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |