Correlation Between Allianz SE and International General

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

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

Diversification Opportunities for Allianz SE and International General

-0.68

Correlation Coefficient

Allianz SE  International General

Excellent diversification

The 3 months correlation between Allianz and International is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and International General Insuranc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International General and Allianz SE 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 SE are associated (or correlated) with International General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International General has no effect on the direction of Allianz SE i.e., Allianz SE and International General go up and down completely randomly.

Pair Corralation between Allianz SE and International General

Assuming the 90 days horizon Allianz SE is expected to generate 1.1 times more return on investment than International General. However, Allianz SE is 1.1 times more volatile than International General Insurance. It trades about 0.02 of its potential returns per unit of risk. International General Insurance is currently generating about -0.22 per unit of risk. If you would invest  31,364  in Allianz SE on September 22, 2024 and sell it today you would earn a total of  120.00  from holding Allianz SE or generate 0.38% return on investment over 90 days.

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

Allianz SE  vs.  International General Insuranc

Allianz SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianz SE has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

International General

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in International General Insurance are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, International General exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Allianz SE and International General

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

The idea behind Allianz SE and International General Insurance 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.