Correlation Between TRON and Allianz SE

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

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

Diversification Opportunities for TRON and Allianz SE

0.16

Correlation Coefficient

TRON  Allianz SE

Average diversification

The 3 months correlation between TRON and Allianz is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and TRON 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 TRON 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 TRON i.e., TRON and Allianz SE go up and down completely randomly.

Pair Corralation between TRON and Allianz SE

Assuming the 90 days trading horizon TRON is expected to under-perform the Allianz SE. In addition to that, TRON is 6.06 times more volatile than Allianz SE. It trades about -0.06 of its total potential returns per unit of risk. Allianz SE is currently generating about -0.01 per unit of volatility. If you would invest  30,070  in Allianz SE on October 9, 2024 and sell it today you would lose (50.00) from holding Allianz SE or give up 0.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

TRON  vs.  Allianz SE

TRON

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Allianz SE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Allianz SE is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TRON and Allianz SE

The main advantage of trading using opposite TRON and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRON 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 TRON 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.