Correlation Between ALLIANZ TECHNOTRLS and Fresnillo Plc

Can any of the company-specific risk be diversified away by investing in both ALLIANZ TECHNOTRLS and Fresnillo Plc 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 Fresnillo Plc 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 Fresnillo plc, you can compare the effects of market volatilities on ALLIANZ TECHNOTRLS and Fresnillo Plc 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 Fresnillo Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLIANZ TECHNOTRLS and Fresnillo Plc.

Diversification Opportunities for ALLIANZ TECHNOTRLS and Fresnillo Plc

0.06

Correlation Coefficient

ALLIANZ TECHNOTRLS  Fresnillo Plc

Significant diversification

The 3 months correlation between ALLIANZ and Fresnillo is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ TECHNOTRLS 025 and Fresnillo plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo plc 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 Fresnillo Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo plc has no effect on the direction of ALLIANZ TECHNOTRLS i.e., ALLIANZ TECHNOTRLS and Fresnillo Plc go up and down completely randomly.

Pair Corralation between ALLIANZ TECHNOTRLS and Fresnillo Plc

Assuming the 90 days horizon ALLIANZ TECHNOTRLS 025 is expected to generate 0.51 times more return on investment than Fresnillo Plc. However, ALLIANZ TECHNOTRLS 025 is 1.96 times less risky than Fresnillo Plc. It trades about 0.33 of its potential returns per unit of risk. Fresnillo plc is currently generating about -0.08 per unit of risk. If you would invest  466.00  in ALLIANZ TECHNOTRLS 025 on September 22, 2024 and sell it today you would earn a total of  44.00  from holding ALLIANZ TECHNOTRLS 025 or generate 9.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

ALLIANZ TECHNOTRLS 025  vs.  Fresnillo plc

ALLIANZ TECHNOTRLS 025

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ TECHNOTRLS 025 are ranked lower than 18 (%) 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.

Fresnillo plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fresnillo plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fresnillo Plc may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ALLIANZ TECHNOTRLS and Fresnillo Plc

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

The idea behind ALLIANZ TECHNOTRLS 025 and Fresnillo plc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.