Correlation Between Allianzgi Technology and Red Oak

Can any of the company-specific risk be diversified away by investing in both Allianzgi Technology and Red Oak 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 Technology and Red Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianzgi Technology Fund and Red Oak Technology, you can compare the effects of market volatilities on Allianzgi Technology and Red Oak 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 Technology with a short position of Red Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianzgi Technology and Red Oak.

Diversification Opportunities for Allianzgi Technology and Red Oak

0.89

Correlation Coefficient

Allianzgi Technology  Red Oak

Very poor diversification

The 3 months correlation between Allianzgi and Red is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Technology Fund and Red Oak Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Red Oak Technology and Allianzgi Technology 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 Technology Fund are associated (or correlated) with Red Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Red Oak Technology has no effect on the direction of Allianzgi Technology i.e., Allianzgi Technology and Red Oak go up and down completely randomly.

Pair Corralation between Allianzgi Technology and Red Oak

Assuming the 90 days horizon Allianzgi Technology Fund is expected to under-perform the Red Oak. In addition to that, Allianzgi Technology is 1.36 times more volatile than Red Oak Technology. It trades about -0.08 of its total potential returns per unit of risk. Red Oak Technology is currently generating about -0.09 per unit of volatility. If you would invest  4,489  in Red Oak Technology on January 30, 2024 and sell it today you would lose (114.00) from holding Red Oak Technology or give up 2.54% of portfolio value over 90 days.

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

Allianzgi Technology Fund  vs.  Red Oak Technology

Allianzgi Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Allianzgi Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Red Oak Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Red Oak Technology are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Red Oak may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Allianzgi Technology and Red Oak

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

The idea behind Allianzgi Technology Fund and Red Oak Technology 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.

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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.