Correlation Between Advanced Medical and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both Advanced Medical 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 Advanced Medical and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Medical Solutions and Allianz Technology Trust, you can compare the effects of market volatilities on Advanced Medical 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 Advanced Medical with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Medical and Allianz Technology.
Diversification Opportunities for Advanced Medical and Allianz Technology
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Allianz is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Medical Solutions 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 Advanced Medical 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 Advanced Medical Solutions 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 Advanced Medical i.e., Advanced Medical and Allianz Technology go up and down completely randomly.
Pair Corralation between Advanced Medical and Allianz Technology
Assuming the 90 days trading horizon Advanced Medical Solutions is expected to under-perform the Allianz Technology. In addition to that, Advanced Medical is 1.8 times more volatile than Allianz Technology Trust. It trades about -0.06 of its total potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.3 per unit of volatility. If you would invest 39,200 in Allianz Technology Trust on September 19, 2024 and sell it today you would earn a total of 2,950 from holding Allianz Technology Trust or generate 7.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Medical Solutions vs. Allianz Technology Trust
Performance |
| Timeline |
| Advanced Medical Sol |
| Allianz Technology Trust |
Advanced Medical and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Medical and Allianz Technology
The main advantage of trading using opposite Advanced Medical and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Medical 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.| Advanced Medical vs. MTI Wireless Edge | Advanced Medical vs. Cairo Communication SpA | Advanced Medical vs. Ebro Foods | Advanced Medical vs. Team Internet Group |
| Allianz Technology vs. Catalyst Media Group | Allianz Technology vs. CATLIN GROUP | Allianz Technology vs. Tamburi Investment Partners | Allianz Technology vs. Magnora ASA |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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