Correlation Between Games Workshop and Allianz Technology

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

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

Diversification Opportunities for Games Workshop and Allianz Technology

0.47

Correlation Coefficient

Games Workshop  Allianz Technology

Very weak diversification

The 3 months correlation between Games and Allianz is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Allianz Technology Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Technology Trust and Games Workshop 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 Games Workshop Group are associated (or correlated) with Allianz Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Technology Trust has no effect on the direction of Games Workshop i.e., Games Workshop and Allianz Technology go up and down completely randomly.

Pair Corralation between Games Workshop and Allianz Technology

Assuming the 90 days trading horizon Games Workshop is expected to generate 1.17 times less return on investment than Allianz Technology. In addition to that, Games Workshop is 1.04 times more volatile than Allianz Technology Trust. It trades about 0.06 of its total potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.07 per unit of volatility. If you would invest  23,250  in Allianz Technology Trust on December 1, 2024 and sell it today you would earn a total of  16,800  from holding Allianz Technology Trust or generate 72.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.57%
Values	Daily Returns

Games Workshop Group  vs.  Allianz Technology Trust

Games Workshop Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Games Workshop Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Games Workshop is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Allianz Technology Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianz Technology Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Allianz Technology is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Games Workshop and Allianz Technology

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

The idea behind Games Workshop Group and Allianz Technology Trust 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .