Correlation Between Allianzgi Convertible and Macquariefirst

Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Macquariefirst 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 Macquariefirst 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 Macquariefirst Tr Global, you can compare the effects of market volatilities on Allianzgi Convertible and Macquariefirst 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 Macquariefirst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Macquariefirst.

Diversification Opportunities for Allianzgi Convertible and Macquariefirst

0.64

Correlation Coefficient

Allianzgi Convertible  Macquariefirst

Poor diversification

The 3 months correlation between Allianzgi and Macquariefirst is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global 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 Macquariefirst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Macquariefirst go up and down completely randomly.

Pair Corralation between Allianzgi Convertible and Macquariefirst

Considering the 90-day investment horizon Allianzgi Convertible Income is expected to under-perform the Macquariefirst. In addition to that, Allianzgi Convertible is 1.06 times more volatile than Macquariefirst Tr Global. It trades about -0.06 of its total potential returns per unit of risk. Macquariefirst Tr Global is currently generating about -0.06 per unit of volatility. If you would invest  752.00  in Macquariefirst Tr Global on February 3, 2024 and sell it today you would lose (11.00) from holding Macquariefirst Tr Global or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Allianzgi Convertible Income  vs.  Macquariefirst Tr Global

Allianzgi Convertible

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Convertible Income are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Allianzgi Convertible is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Macquariefirst Tr Global

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Macquariefirst Tr Global are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Macquariefirst is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Allianzgi Convertible and Macquariefirst

The main advantage of trading using opposite Allianzgi Convertible and Macquariefirst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Macquariefirst 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 Macquariefirst will offset losses from the drop in Macquariefirst's long position.

The idea behind Allianzgi Convertible Income and Macquariefirst Tr Global 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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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.