Correlation Between AstraZeneca PLC and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC 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 AstraZeneca PLC and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC ADR and Allianz Technology Trust, you can compare the effects of market volatilities on AstraZeneca PLC 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 AstraZeneca PLC with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and Allianz Technology.
Diversification Opportunities for AstraZeneca PLC and Allianz Technology
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AstraZeneca and Allianz is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC ADR 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 AstraZeneca PLC 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 AstraZeneca PLC ADR 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 AstraZeneca PLC i.e., AstraZeneca PLC and Allianz Technology go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and Allianz Technology
Assuming the 90 days trading horizon AstraZeneca PLC ADR is expected to under-perform the Allianz Technology. But the stock apears to be less risky and, when comparing its historical volatility, AstraZeneca PLC ADR is 1.27 times less risky than Allianz Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Allianz Technology Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 26,700 in Allianz Technology Trust on August 26, 2024 and sell it today you would earn a total of 13,100 from holding Allianz Technology Trust or generate 49.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
AstraZeneca PLC ADR vs. Allianz Technology Trust
Performance |
| Timeline |
| AstraZeneca PLC ADR |
| Allianz Technology Trust |
AstraZeneca PLC and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and Allianz Technology
The main advantage of trading using opposite AstraZeneca PLC and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC 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.| AstraZeneca PLC vs. Allianz Technology Trust | AstraZeneca PLC vs. Elmos Semiconductor SE | AstraZeneca PLC vs. Sunny Optical Technology | AstraZeneca PLC vs. Cognizant Technology Solutions |
| Allianz Technology vs. Catalyst Media Group | Allianz Technology vs. Oncimmune Holdings plc | Allianz Technology vs. Invesco Health Care | Allianz Technology vs. Coor Service Management |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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