Correlation Between International General and Allianz SE

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

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

Diversification Opportunities for International General and Allianz SE

0.57

Correlation Coefficient

International General  Allianz SE

Very weak diversification

The 3 months correlation between International and Allianz is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding International General Insuranc and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and International General 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 International General Insurance 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 has no effect on the direction of International General i.e., International General and Allianz SE go up and down completely randomly.

Pair Corralation between International General and Allianz SE

Given the investment horizon of 90 days International General is expected to generate 2.12 times less return on investment than Allianz SE. In addition to that, International General is 1.14 times more volatile than Allianz SE. It trades about 0.08 of its total potential returns per unit of risk. Allianz SE is currently generating about 0.19 per unit of volatility. If you would invest  30,575  in Allianz SE on December 29, 2024 and sell it today you would earn a total of  6,950  from holding Allianz SE or generate 22.73% return on investment over 90 days.

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

International General Insuranc  vs.  Allianz SE

International General

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International General Insurance are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak forward indicators, International General may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Allianz SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Allianz SE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with International General and Allianz SE

The main advantage of trading using opposite International General and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International General 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 International General Insurance and Allianz SE 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.