Correlation Between Armada Hflr and Allianz SE

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

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

Diversification Opportunities for Armada Hflr and Allianz SE

-0.36

Correlation Coefficient

Armada Hflr  Allianz SE

Very good diversification

The 3 months correlation between Armada and Allianz is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Allianz SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE ADR and Armada Hflr 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 Armada Hflr Pr 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 ADR has no effect on the direction of Armada Hflr i.e., Armada Hflr and Allianz SE go up and down completely randomly.

Pair Corralation between Armada Hflr and Allianz SE

Considering the 90-day investment horizon Armada Hflr is expected to generate 17.03 times less return on investment than Allianz SE. In addition to that, Armada Hflr is 1.21 times more volatile than Allianz SE ADR. It trades about 0.0 of its total potential returns per unit of risk. Allianz SE ADR is currently generating about 0.04 per unit of volatility. If you would invest  2,236  in Allianz SE ADR on October 7, 2024 and sell it today you would earn a total of  143.00  from holding Allianz SE ADR or generate 6.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	26.21%
Values	Daily Returns

Armada Hflr Pr  vs.  Allianz SE ADR

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Allianz SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianz SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Allianz SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Armada Hflr and Allianz SE

The main advantage of trading using opposite Armada Hflr and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr and Allianz SE ADR 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.