Correlation Between American International and Allianz SE
Can any of the company-specific risk be diversified away by investing in both American International 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 American International and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American International Group and Allianz SE, you can compare the effects of market volatilities on American International 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 American International with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of American International and Allianz SE.
Diversification Opportunities for American International and Allianz SE
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between American and Allianz is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding American International Group and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and American International 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 American International Group 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 American International i.e., American International and Allianz SE go up and down completely randomly.
Pair Corralation between American International and Allianz SE
Considering the 90-day investment horizon American International Group is expected to generate 0.66 times more return on investment than Allianz SE. However, American International Group is 1.51 times less risky than Allianz SE. It trades about -0.08 of its potential returns per unit of risk. Allianz SE is currently generating about -0.08 per unit of risk. If you would invest 7,743 in American International Group on August 24, 2024 and sell it today you would lose (145.00) from holding American International Group or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
American International Group vs. Allianz SE
Performance |
| Timeline |
| American International |
| Allianz SE |
American International and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American International and Allianz SE
The main advantage of trading using opposite American International and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American International 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.| American International vs. Axa Equitable Holdings | American International vs. Arch Capital Group | American International vs. Old Republic International | American International vs. Sun Life Financial |
| Allianz SE vs. Assicurazioni Generali SpA | Allianz SE vs. ageas SANV | Allianz SE vs. AXA SA | Allianz SE vs. Sampo OYJ |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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