Correlation Between Allianz Technology and Dominos Pizza

Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Dominos Pizza 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 Dominos Pizza 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 Dominos Pizza Group, you can compare the effects of market volatilities on Allianz Technology and Dominos Pizza 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 Dominos Pizza. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Dominos Pizza.

Diversification Opportunities for Allianz Technology and Dominos Pizza

-0.15

Correlation Coefficient

Allianz Technology  Dominos Pizza

Good diversification

The 3 months correlation between Allianz and Dominos is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Dominos Pizza Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dominos Pizza Group 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 Dominos Pizza. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dominos Pizza Group has no effect on the direction of Allianz Technology i.e., Allianz Technology and Dominos Pizza go up and down completely randomly.

Pair Corralation between Allianz Technology and Dominos Pizza

Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.69 times more return on investment than Dominos Pizza. However, Allianz Technology Trust is 1.46 times less risky than Dominos Pizza. It trades about 0.18 of its potential returns per unit of risk. Dominos Pizza Group is currently generating about -0.05 per unit of risk. If you would invest  36,900  in Allianz Technology Trust on October 22, 2024 and sell it today you would earn a total of  6,000  from holding Allianz Technology Trust or generate 16.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Allianz Technology Trust  vs.  Dominos Pizza Group

Allianz Technology Trust

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz Technology Trust are ranked lower than 14 (%) 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.

Dominos Pizza Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dominos Pizza Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Allianz Technology and Dominos Pizza

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

The idea behind Allianz Technology Trust and Dominos Pizza Group 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..