Correlation Between Velo3D and Allianzgi Technology

Can any of the company-specific risk be diversified away by investing in both Velo3D and Allianzgi Technology 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 Velo3D and Allianzgi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Velo3D Inc and Allianzgi Technology Fund, you can compare the effects of market volatilities on Velo3D and Allianzgi Technology 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 Velo3D with a short position of Allianzgi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Velo3D and Allianzgi Technology.

Diversification Opportunities for Velo3D and Allianzgi Technology

-0.82

Correlation Coefficient

Velo3D  Allianzgi Technology

Pay attention - limited upside

The 3 months correlation between Velo3D and Allianzgi is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Velo3D Inc and Allianzgi Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Technology and Velo3D 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 Velo3D Inc are associated (or correlated) with Allianzgi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Technology has no effect on the direction of Velo3D i.e., Velo3D and Allianzgi Technology go up and down completely randomly.

Pair Corralation between Velo3D and Allianzgi Technology

Considering the 90-day investment horizon Velo3D Inc is expected to generate 22.39 times more return on investment than Allianzgi Technology. However, Velo3D is 22.39 times more volatile than Allianzgi Technology Fund. It trades about 0.82 of its potential returns per unit of risk. Allianzgi Technology Fund is currently generating about 0.21 per unit of risk. If you would invest  38.00  in Velo3D Inc on August 15, 2024 and sell it today you would earn a total of  59.00  from holding Velo3D Inc or generate 155.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	11.9%
Values	Daily Returns

Velo3D Inc  vs.  Allianzgi Technology Fund

Velo3D Inc

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days Velo3D Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain essential indicators, Velo3D exhibited solid returns over the last few months and may actually be approaching a breakup point.

Allianzgi Technology

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Technology Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Allianzgi Technology may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Velo3D and Allianzgi Technology

The main advantage of trading using opposite Velo3D and Allianzgi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Velo3D position performs unexpectedly, Allianzgi Technology 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 Technology will offset losses from the drop in Allianzgi Technology's long position.

The idea behind Velo3D Inc and Allianzgi Technology Fund 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.