Correlation Between ALLIANZ SE and TT Electronics

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

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

Diversification Opportunities for ALLIANZ SE and TT Electronics

-0.71

Correlation Coefficient

ALLIANZ SE  TT Electronics

Pay attention - limited upside

The 3 months correlation between ALLIANZ and 7TT is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ SE UNSPADR and TT Electronics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TT Electronics PLC 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 UNSPADR are associated (or correlated) with TT Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TT Electronics PLC has no effect on the direction of ALLIANZ SE i.e., ALLIANZ SE and TT Electronics go up and down completely randomly.

Pair Corralation between ALLIANZ SE and TT Electronics

Assuming the 90 days trading horizon ALLIANZ SE UNSPADR is expected to generate 0.78 times more return on investment than TT Electronics. However, ALLIANZ SE UNSPADR is 1.27 times less risky than TT Electronics. It trades about 0.21 of its potential returns per unit of risk. TT Electronics PLC is currently generating about -0.16 per unit of risk. If you would invest  2,900  in ALLIANZ SE UNSPADR on December 22, 2024 and sell it today you would earn a total of  600.00  from holding ALLIANZ SE UNSPADR or generate 20.69% return on investment over 90 days.

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

ALLIANZ SE UNSPADR  vs.  TT Electronics PLC

ALLIANZ SE UNSPADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALLIANZ SE UNSPADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, ALLIANZ SE reported solid returns over the last few months and may actually be approaching a breakup point.

TT Electronics PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days TT Electronics PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ALLIANZ SE and TT Electronics

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

The idea behind ALLIANZ SE UNSPADR and TT Electronics 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.

Check out your portfolio center.

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.