Correlation Between ALLIANZ TECHNOTRLS and NEW PACIFIC

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

By analyzing existing cross correlation between ALLIANZ TECHNOTRLS 025 and NEW PACIFIC METALS, you can compare the effects of market volatilities on ALLIANZ TECHNOTRLS and NEW PACIFIC 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 ALLIANZ TECHNOTRLS with a short position of NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLIANZ TECHNOTRLS and NEW PACIFIC.

Diversification Opportunities for ALLIANZ TECHNOTRLS and NEW PACIFIC

-0.27

Correlation Coefficient

ALLIANZ TECHNOTRLS  NEW PACIFIC

Very good diversification

The 3 months correlation between ALLIANZ and NEW is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ TECHNOTRLS 025 and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS and ALLIANZ TECHNOTRLS 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 ALLIANZ TECHNOTRLS 025 are associated (or correlated) with NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of ALLIANZ TECHNOTRLS i.e., ALLIANZ TECHNOTRLS and NEW PACIFIC go up and down completely randomly.

Pair Corralation between ALLIANZ TECHNOTRLS and NEW PACIFIC

Assuming the 90 days horizon ALLIANZ TECHNOTRLS 025 is expected to generate 0.42 times more return on investment than NEW PACIFIC. However, ALLIANZ TECHNOTRLS 025 is 2.38 times less risky than NEW PACIFIC. It trades about 0.1 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about -0.02 per unit of risk. If you would invest  320.00  in ALLIANZ TECHNOTRLS 025 on October 3, 2024 and sell it today you would earn a total of  178.00  from holding ALLIANZ TECHNOTRLS 025 or generate 55.63% return on investment over 90 days.

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

ALLIANZ TECHNOTRLS 025  vs.  NEW PACIFIC METALS

ALLIANZ TECHNOTRLS 025

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ TECHNOTRLS 025 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ALLIANZ TECHNOTRLS reported solid returns over the last few months and may actually be approaching a breakup point.

NEW PACIFIC METALS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NEW PACIFIC METALS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ALLIANZ TECHNOTRLS and NEW PACIFIC

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

The idea behind ALLIANZ TECHNOTRLS 025 and NEW PACIFIC METALS 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.