Correlation Between NN Group and Allianz SE
Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NN Group NV and Allianz SE, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and Allianz SE.
Diversification Opportunities for NN Group and Allianz SE
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 2NN and Allianz is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and NN Group 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 NN Group NV 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 NN Group i.e., NN Group and Allianz SE go up and down completely randomly.
Pair Corralation between NN Group and Allianz SE
Assuming the 90 days horizon NN Group NV is expected to under-perform the Allianz SE. In addition to that, NN Group is 1.26 times more volatile than Allianz SE. It trades about -0.12 of its total potential returns per unit of risk. Allianz SE is currently generating about 0.05 per unit of volatility. If you would invest 28,950 in Allianz SE on September 1, 2024 and sell it today you would earn a total of 250.00 from holding Allianz SE or generate 0.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NN Group NV vs. Allianz SE
Performance |
| Timeline |
| NN Group NV |
| Allianz SE |
NN Group and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NN Group and Allianz SE
The main advantage of trading using opposite NN Group and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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.| NN Group vs. AIR PRODCHEMICALS | NN Group vs. Mitsubishi Gas Chemical | NN Group vs. NISSAN CHEMICAL IND | NN Group vs. MagnaChip Semiconductor Corp |
| Allianz SE vs. United Breweries Co | Allianz SE vs. Hyster Yale Materials Handling | Allianz SE vs. Mitsubishi Materials | Allianz SE vs. Applied Materials |
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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