Correlation Between Alfa Financial and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and Allianz Technology Trust, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and Allianz Technology.
Diversification Opportunities for Alfa Financial and Allianz Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Alfa and Allianz is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software 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 Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and Allianz Technology go up and down completely randomly.
Pair Corralation between Alfa Financial and Allianz Technology
Assuming the 90 days trading horizon Alfa Financial is expected to generate 1.54 times less return on investment than Allianz Technology. But when comparing it to its historical volatility, Alfa Financial Software is 1.11 times less risky than Allianz Technology. It trades about 0.09 of its potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 42,300 in Allianz Technology Trust on November 3, 2024 and sell it today you would earn a total of 2,000 from holding Allianz Technology Trust or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. Allianz Technology Trust
Performance |
| Timeline |
| Alfa Financial Software |
| Allianz Technology Trust |
Alfa Financial and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and Allianz Technology
The main advantage of trading using opposite Alfa Financial and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. Check Point Software | Alfa Financial vs. Europa Metals | Alfa Financial vs. National Beverage Corp | Alfa Financial vs. CNH Industrial NV |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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