Correlation Between Sparebank and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both Sparebank 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 Sparebank and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sparebank 1 SR and Allianz Technology Trust, you can compare the effects of market volatilities on Sparebank 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 Sparebank with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sparebank and Allianz Technology.
Diversification Opportunities for Sparebank and Allianz Technology
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sparebank and Allianz is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sparebank 1 SR 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 Sparebank 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 Sparebank 1 SR 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 Sparebank i.e., Sparebank and Allianz Technology go up and down completely randomly.
Pair Corralation between Sparebank and Allianz Technology
Assuming the 90 days trading horizon Sparebank is expected to generate 2.04 times less return on investment than Allianz Technology. But when comparing it to its historical volatility, Sparebank 1 SR is 1.8 times less risky than Allianz Technology. It trades about 0.06 of its potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 25,750 in Allianz Technology Trust on August 31, 2024 and sell it today you would earn a total of 14,000 from holding Allianz Technology Trust or generate 54.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Sparebank 1 SR vs. Allianz Technology Trust
Performance |
| Timeline |
| Sparebank 1 SR |
| Allianz Technology Trust |
Sparebank and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sparebank and Allianz Technology
The main advantage of trading using opposite Sparebank and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sparebank 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.| Sparebank vs. Neometals | Sparebank vs. Coor Service Management | Sparebank vs. Aeorema Communications Plc | Sparebank vs. JLEN Environmental Assets |
| Allianz Technology vs. DXC Technology Co | Allianz Technology vs. International Biotechnology Trust | Allianz Technology vs. Bytes Technology | Allianz Technology vs. Ashtead Technology Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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