Correlation Between Allianzgi Convertible and Federal Home
Can any of the company-specific risk be diversified away by investing in both Allianzgi Convertible and Federal Home 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 Federal Home 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 Federal Home Loan, you can compare the effects of market volatilities on Allianzgi Convertible and Federal Home 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 Federal Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Convertible and Federal Home.
Diversification Opportunities for Allianzgi Convertible and Federal Home
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Allianzgi and Federal is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Convertible Income and Federal Home Loan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Home Loan 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 Federal Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Home Loan has no effect on the direction of Allianzgi Convertible i.e., Allianzgi Convertible and Federal Home go up and down completely randomly.
Pair Corralation between Allianzgi Convertible and Federal Home
Considering the 90-day investment horizon Allianzgi Convertible Income is expected to under-perform the Federal Home. But the fund apears to be less risky and, when comparing its historical volatility, Allianzgi Convertible Income is 2.05 times less risky than Federal Home. The fund trades about -0.18 of its potential returns per unit of risk. The Federal Home Loan is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 610.00 in Federal Home Loan on January 26, 2024 and sell it today you would lose (10.00) from holding Federal Home Loan or give up 1.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Allianzgi Convertible Income vs. Federal Home Loan
Performance |
Timeline |
Allianzgi Convertible |
Federal Home Loan |
Allianzgi Convertible and Federal Home Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Allianzgi Convertible and Federal Home
The main advantage of trading using opposite Allianzgi Convertible and Federal Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Convertible position performs unexpectedly, Federal Home 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 Federal Home will offset losses from the drop in Federal Home's long position.The idea behind Allianzgi Convertible Income and Federal Home Loan 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.Federal Home vs. Federal National Mortgage | Federal Home vs. Federal Home Loan | Federal Home vs. Federal Home Loan |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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