Correlation Between BANK HANDLOWY and Allianz SE

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

By analyzing existing cross correlation between BANK HANDLOWY and Allianz SE, you can compare the effects of market volatilities on BANK HANDLOWY and Allianz SE 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 BANK HANDLOWY with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK HANDLOWY and Allianz SE.

Diversification Opportunities for BANK HANDLOWY and Allianz SE

0.05

Correlation Coefficient

BANK HANDLOWY  Allianz SE

Significant diversification

The 3 months correlation between BANK and Allianz is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding BANK HANDLOWY and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and BANK HANDLOWY 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 BANK HANDLOWY are associated (or correlated) with Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE has no effect on the direction of BANK HANDLOWY i.e., BANK HANDLOWY and Allianz SE go up and down completely randomly.

Pair Corralation between BANK HANDLOWY and Allianz SE

Assuming the 90 days trading horizon BANK HANDLOWY is expected to generate 3.51 times less return on investment than Allianz SE. But when comparing it to its historical volatility, BANK HANDLOWY is 1.02 times less risky than Allianz SE. It trades about 0.03 of its potential returns per unit of risk. Allianz SE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  28,460  in Allianz SE on September 12, 2024 and sell it today you would earn a total of  1,570  from holding Allianz SE or generate 5.52% return on investment over 90 days.

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

BANK HANDLOWY  vs.  Allianz SE

BANK HANDLOWY

Risk-Adjusted Performance

2 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BANK HANDLOWY are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, BANK HANDLOWY is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Allianz SE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Allianz SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with BANK HANDLOWY and Allianz SE

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

The idea behind BANK HANDLOWY and Allianz SE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..