Correlation Between Nasdaq and AllianzIM Large

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

By analyzing existing cross correlation between Nasdaq Inc and AllianzIM Large Cap, you can compare the effects of market volatilities on Nasdaq and AllianzIM Large 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 Nasdaq with a short position of AllianzIM Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and AllianzIM Large.

Diversification Opportunities for Nasdaq and AllianzIM Large

0.62

Correlation Coefficient

Nasdaq  AllianzIM Large

Poor diversification

The 3 months correlation between Nasdaq and AllianzIM is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and AllianzIM Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AllianzIM Large Cap and Nasdaq 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 Nasdaq Inc are associated (or correlated) with AllianzIM Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AllianzIM Large Cap has no effect on the direction of Nasdaq i.e., Nasdaq and AllianzIM Large go up and down completely randomly.

Pair Corralation between Nasdaq and AllianzIM Large

Given the investment horizon of 90 days Nasdaq Inc is expected to under-perform the AllianzIM Large. In addition to that, Nasdaq is 3.38 times more volatile than AllianzIM Large Cap. It trades about -0.1 of its total potential returns per unit of risk. AllianzIM Large Cap is currently generating about -0.17 per unit of volatility. If you would invest  3,326  in AllianzIM Large Cap on December 4, 2024 and sell it today you would lose (52.00) from holding AllianzIM Large Cap or give up 1.56% of portfolio value over 90 days.

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

Nasdaq Inc  vs.  AllianzIM Large Cap

Nasdaq Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

AllianzIM Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days AllianzIM Large Cap has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, AllianzIM Large is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nasdaq and AllianzIM Large

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

The idea behind Nasdaq Inc and AllianzIM Large Cap 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.