Correlation Between Allianz SE and ALLIANZ SE

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

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

Diversification Opportunities for Allianz SE and ALLIANZ SE

0.85

Correlation Coefficient

Allianz SE  ALLIANZ SE

Very poor diversification

The 3 months correlation between Allianz and ALLIANZ is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR 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 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 UNSPADR has no effect on the direction of Allianz SE i.e., Allianz SE and ALLIANZ SE go up and down completely randomly.

Pair Corralation between Allianz SE and ALLIANZ SE

Assuming the 90 days horizon Allianz SE is expected to generate 1.05 times less return on investment than ALLIANZ SE. But when comparing it to its historical volatility, Allianz SE is 2.23 times less risky than ALLIANZ SE. It trades about 0.09 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,860  in ALLIANZ SE UNSPADR on September 23, 2024 and sell it today you would earn a total of  40.00  from holding ALLIANZ SE UNSPADR or generate 1.4% return on investment over 90 days.

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

Allianz SE  vs.  ALLIANZ SE UNSPADR

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

ALLIANZ SE UNSPADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ SE UNSPADR are ranked lower than 1 (%) 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 Allianz SE and ALLIANZ SE

The main advantage of trading using opposite Allianz SE and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE 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 Allianz SE and ALLIANZ SE UNSPADR 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.