Correlation Between Allianz Technology and National Beverage

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

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

Diversification Opportunities for Allianz Technology and National Beverage

0.18

Correlation Coefficient

Allianz Technology  National Beverage

Average diversification

The 3 months correlation between Allianz and National is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and National Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Beverage Corp and Allianz Technology 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 Technology Trust are associated (or correlated) with National Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Beverage Corp has no effect on the direction of Allianz Technology i.e., Allianz Technology and National Beverage go up and down completely randomly.

Pair Corralation between Allianz Technology and National Beverage

Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.57 times more return on investment than National Beverage. However, Allianz Technology Trust is 1.74 times less risky than National Beverage. It trades about 0.16 of its potential returns per unit of risk. National Beverage Corp is currently generating about -0.36 per unit of risk. If you would invest  40,550  in Allianz Technology Trust on October 4, 2024 and sell it today you would earn a total of  1,350  from holding Allianz Technology Trust or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Allianz Technology Trust  vs.  National Beverage Corp

Allianz Technology Trust

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz Technology Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Allianz Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

National Beverage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Beverage Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, National Beverage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Allianz Technology and National Beverage

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

The idea behind Allianz Technology Trust and National Beverage Corp 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.