Correlation Between Allianzgi Convertible and State Street
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and State Street 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 State Street 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 State Street Target, you can compare the effects of market volatilities on Allianzgi Convertible and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and State Street.
Diversification Opportunities for Allianzgi Convertible and State Street
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allianzgi and State is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and State Street Target in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Target 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Target has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and State Street go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and State Street
Assuming the 90 days horizon Allianzgi Convertible is expected to generate 1.24 times less return on investment than State Street. In addition to that, Allianzgi Convertible is 1.06 times more volatile than State Street Target. It trades about 0.08 of its total potential returns per unit of risk. State Street Target is currently generating about 0.1 per unit of volatility. If you would invest 1,193 in State Street Target on September 12, 2024 and sell it today you would earn a total of 468.00 from holding State Street Target or generate 39.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. State Street Target
Performance |
| Timeline |
| Allianzgi Convertible |
| State Street Target |
Allianzgi Convertible and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and State Street
The main advantage of trading using opposite Allianzgi Convertible and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.The idea behind Allianzgi Convertible Income and State Street Target 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.
| State Street vs. Allianzgi Convertible Income | State Street vs. Putnam Convertible Incm Gwth | State Street vs. Absolute Convertible Arbitrage | State Street vs. Advent Claymore Convertible |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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