Correlation Between Allianzgi Convertible and Voya Smallcap
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Voya Smallcap 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 Voya Smallcap 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 Voya Smallcap Opportunities, you can compare the effects of market volatilities on Allianzgi Convertible and Voya Smallcap 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 Voya Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Voya Smallcap.
Diversification Opportunities for Allianzgi Convertible and Voya Smallcap
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allianzgi and Voya is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Voya Smallcap Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Smallcap Opport 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 Voya Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Smallcap Opport has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Voya Smallcap go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Voya Smallcap
Assuming the 90 days horizon Allianzgi Convertible Income is expected to generate 9.45 times more return on investment than Voya Smallcap. However, Allianzgi Convertible is 9.45 times more volatile than Voya Smallcap Opportunities. It trades about 0.05 of its potential returns per unit of risk. Voya Smallcap Opportunities is currently generating about 0.02 per unit of risk. If you would invest 318.00 in Allianzgi Convertible Income on January 11, 2025 and sell it today you would earn a total of 1,020 from holding Allianzgi Convertible Income or generate 320.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Allianzgi Convertible Income vs. Voya Smallcap Opportunities
Performance |
| Timeline |
| Allianzgi Convertible |
| Voya Smallcap Opport |
Allianzgi Convertible and Voya Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianzgi Convertible and Voya Smallcap
The main advantage of trading using opposite Allianzgi Convertible and Voya Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Voya Smallcap 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 Voya Smallcap will offset losses from the drop in Voya Smallcap's long position.The idea behind Allianzgi Convertible Income and Voya Smallcap Opportunities 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.
| Voya Smallcap vs. Voya Bond Index | Voya Smallcap vs. Voya Bond Index | Voya Smallcap vs. Voya Limited Maturity | Voya Smallcap vs. Voya Limited Maturity |
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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