Correlation Between Allianz SE and ASSGENERALI ADR
Can any of the company-specific risk be diversified away by investing in both Allianz SE and ASSGENERALI ADR 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 Allianz SE and ASSGENERALI ADR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz SE and ASSGENERALI ADR 12EO, you can compare the effects of market volatilities on Allianz SE and ASSGENERALI ADR 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 Allianz SE with a short position of ASSGENERALI ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and ASSGENERALI ADR.
Diversification Opportunities for Allianz SE and ASSGENERALI ADR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and ASSGENERALI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and ASSGENERALI ADR 12EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSGENERALI ADR 12EO and Allianz SE 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 Allianz SE are associated (or correlated) with ASSGENERALI ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSGENERALI ADR 12EO has no effect on the direction of Allianz SE i.e., Allianz SE and ASSGENERALI ADR go up and down completely randomly.
Pair Corralation between Allianz SE and ASSGENERALI ADR
Assuming the 90 days horizon Allianz SE is expected to generate 2.52 times less return on investment than ASSGENERALI ADR. But when comparing it to its historical volatility, Allianz SE is 1.71 times less risky than ASSGENERALI ADR. It trades about 0.09 of its potential returns per unit of risk. ASSGENERALI ADR 12EO is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,200 in ASSGENERALI ADR 12EO on August 29, 2024 and sell it today you would earn a total of 130.00 from holding ASSGENERALI ADR 12EO or generate 10.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz SE vs. ASSGENERALI ADR 12EO
Performance |
| Timeline |
| Allianz SE |
| ASSGENERALI ADR 12EO |
Allianz SE and ASSGENERALI ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz SE and ASSGENERALI ADR
The main advantage of trading using opposite Allianz SE and ASSGENERALI ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE position performs unexpectedly, ASSGENERALI ADR 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 ASSGENERALI ADR will offset losses from the drop in ASSGENERALI ADR's long position.| Allianz SE vs. AXWAY SOFTWARE EO | Allianz SE vs. Axcelis Technologies | Allianz SE vs. Sqs Software Quality | Allianz SE vs. MAGIC SOFTWARE ENTR |
| ASSGENERALI ADR vs. HomeToGo SE | ASSGENERALI ADR vs. Addus HomeCare | ASSGENERALI ADR vs. American Homes 4 | ASSGENERALI ADR vs. Retail Estates NV |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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