Correlation Between BB Seguridade and Allianz SE

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

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

Diversification Opportunities for BB Seguridade and Allianz SE

0.38

Correlation Coefficient

BB Seguridade  Allianz SE

Weak diversification

The 3 months correlation between BBSEY and Allianz is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BB Seguridade Participacoes and Allianz SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE ADR and BB Seguridade 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 BB Seguridade Participacoes 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 ADR has no effect on the direction of BB Seguridade i.e., BB Seguridade and Allianz SE go up and down completely randomly.

Pair Corralation between BB Seguridade and Allianz SE

If you would invest  577.00  in BB Seguridade Participacoes on September 15, 2024 and sell it today you would earn a total of  25.00  from holding BB Seguridade Participacoes or generate 4.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.79%
Values	Daily Returns

BB Seguridade Participacoes  vs.  Allianz SE ADR

BB Seguridade Partic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BB Seguridade Participacoes has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Allianz SE ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianz SE ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Allianz SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BB Seguridade and Allianz SE

The main advantage of trading using opposite BB Seguridade and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BB Seguridade 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 BB Seguridade Participacoes and Allianz SE ADR 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 Stocks Directory module to find actively traded stocks across global markets.