Correlation Between Octopus Aim and Allianz Technology

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

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

Diversification Opportunities for Octopus Aim and Allianz Technology

-0.31

Correlation Coefficient

Octopus Aim  Allianz Technology

Very good diversification

The 3 months correlation between Octopus and Allianz is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Octopus Aim Vct 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 Octopus Aim 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 Octopus Aim Vct 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 Octopus Aim i.e., Octopus Aim and Allianz Technology go up and down completely randomly.

Pair Corralation between Octopus Aim and Allianz Technology

Assuming the 90 days trading horizon Octopus Aim Vct is expected to under-perform the Allianz Technology. But the stock apears to be less risky and, when comparing its historical volatility, Octopus Aim Vct is 2.71 times less risky than Allianz Technology. The stock trades about -0.03 of its potential returns per unit of risk. The Allianz Technology Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  29,750  in Allianz Technology Trust on October 7, 2024 and sell it today you would earn a total of  12,850  from holding Allianz Technology Trust or generate 43.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Octopus Aim Vct  vs.  Allianz Technology Trust

Octopus Aim Vct

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianz Technology Trust

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz Technology Trust are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Allianz Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Octopus Aim and Allianz Technology

The main advantage of trading using opposite Octopus Aim and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Octopus Aim 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 Octopus Aim Vct 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.