Correlation Between Allianz SE and New HopeLimited
Can any of the company-specific risk be diversified away by investing in both Allianz SE and New HopeLimited 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 New HopeLimited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz SE and New Hope, you can compare the effects of market volatilities on Allianz SE and New HopeLimited 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 New HopeLimited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and New HopeLimited.
Diversification Opportunities for Allianz SE and New HopeLimited
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and New is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and New Hope in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New HopeLimited 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 New HopeLimited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New HopeLimited has no effect on the direction of Allianz SE i.e., Allianz SE and New HopeLimited go up and down completely randomly.
Pair Corralation between Allianz SE and New HopeLimited
Assuming the 90 days horizon Allianz SE is expected to generate 0.27 times more return on investment than New HopeLimited. However, Allianz SE is 3.69 times less risky than New HopeLimited. It trades about 0.04 of its potential returns per unit of risk. New Hope is currently generating about -0.01 per unit of risk. If you would invest 29,020 in Allianz SE on September 3, 2024 and sell it today you would earn a total of 180.00 from holding Allianz SE or generate 0.62% 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. New Hope
Performance |
| Timeline |
| Allianz SE |
| New HopeLimited |
Allianz SE and New HopeLimited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz SE and New HopeLimited
The main advantage of trading using opposite Allianz SE and New HopeLimited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz SE position performs unexpectedly, New HopeLimited 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 New HopeLimited will offset losses from the drop in New HopeLimited's long position.| Allianz SE vs. Datang International Power | Allianz SE vs. Merit Medical Systems | Allianz SE vs. Information Services International Dentsu | Allianz SE vs. PRECISION DRILLING P |
| New HopeLimited vs. China Shenhua Energy | New HopeLimited vs. PT Bayan Resources | New HopeLimited vs. Yanzhou Coal Mining | New HopeLimited vs. Yanzhou Coal Mining |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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