Correlation Between Large Cap and Allianzgi Health

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

By analyzing existing cross correlation between Large Cap Value and Allianzgi Health Sciences, you can compare the effects of market volatilities on Large Cap and Allianzgi Health 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 Large Cap with a short position of Allianzgi Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Large Cap and Allianzgi Health.

Diversification Opportunities for Large Cap and Allianzgi Health

0.1

Correlation Coefficient

Large Cap  Allianzgi Health

Average diversification

The 3 months correlation between Large and Allianzgi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Large Cap Value and Allianzgi Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Health Sciences and Large Cap 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 Large Cap Value are associated (or correlated) with Allianzgi Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Health Sciences has no effect on the direction of Large Cap i.e., Large Cap and Allianzgi Health go up and down completely randomly.

Pair Corralation between Large Cap and Allianzgi Health

Assuming the 90 days horizon Large Cap Value is expected to generate 0.62 times more return on investment than Allianzgi Health. However, Large Cap Value is 1.62 times less risky than Allianzgi Health. It trades about 0.2 of its potential returns per unit of risk. Allianzgi Health Sciences is currently generating about 0.0 per unit of risk. If you would invest  1,699  in Large Cap Value on May 3, 2025 and sell it today you would earn a total of  143.00  from holding Large Cap Value or generate 8.42% return on investment over 90 days.

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

Large Cap Value  vs.  Allianzgi Health Sciences

Large Cap Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Large Cap Value are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Large Cap may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Allianzgi Health Sciences

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianzgi Health Sciences has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Allianzgi Health is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Large Cap and Allianzgi Health

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

The idea behind Large Cap Value and Allianzgi Health Sciences 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.