Correlation Between AAC TECHNOLOGHLDGADR and ALLIANZ SE
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR and ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR with a short position of ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and ALLIANZ SE.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and ALLIANZ SE
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between AAC and ALLIANZ is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 UNSPADR has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and ALLIANZ SE go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and ALLIANZ SE
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 2.27 times more return on investment than ALLIANZ SE. However, AAC TECHNOLOGHLDGADR is 2.27 times more volatile than ALLIANZ SE UNSPADR. It trades about 0.1 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.06 per unit of risk. If you would invest 276.00 in AAC TECHNOLOGHLDGADR on September 3, 2024 and sell it today you would earn a total of 134.00 from holding AAC TECHNOLOGHLDGADR or generate 48.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. ALLIANZ SE UNSPADR
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| ALLIANZ SE UNSPADR |
AAC TECHNOLOGHLDGADR and ALLIANZ SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and ALLIANZ SE
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR 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.| AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Cisco Systems | AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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