Correlation Between Stellar and Allianz SE

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

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

Diversification Opportunities for Stellar and Allianz SE

-0.72

Correlation Coefficient

Stellar  Allianz SE

Pay attention - limited upside

The 3 months correlation between Stellar and Allianz is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and Stellar 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 Stellar 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 Stellar i.e., Stellar and Allianz SE go up and down completely randomly.

Pair Corralation between Stellar and Allianz SE

Assuming the 90 days trading horizon Stellar is expected to under-perform the Allianz SE. In addition to that, Stellar is 6.87 times more volatile than Allianz SE. It trades about -0.07 of its total potential returns per unit of risk. Allianz SE is currently generating about 0.32 per unit of volatility. If you would invest  29,480  in Allianz SE on December 23, 2024 and sell it today you would earn a total of  5,720  from holding Allianz SE or generate 19.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	93.85%
Values	Daily Returns

Stellar  vs.  Allianz SE

Stellar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Stellar shareholders.

Allianz SE

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz SE are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Allianz SE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stellar and Allianz SE

The main advantage of trading using opposite Stellar and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar 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 Stellar 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.