Correlation Between ASSGENERALI ADR and Allianz SE
Can any of the company-specific risk be diversified away by investing in both ASSGENERALI ADR 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 ASSGENERALI ADR and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASSGENERALI ADR 12EO and Allianz SE, you can compare the effects of market volatilities on ASSGENERALI ADR 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 ASSGENERALI ADR with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASSGENERALI ADR and Allianz SE.
Diversification Opportunities for ASSGENERALI ADR and Allianz SE
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ASSGENERALI and Allianz is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding ASSGENERALI ADR 12EO and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and ASSGENERALI ADR 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 ASSGENERALI ADR 12EO 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 ASSGENERALI ADR i.e., ASSGENERALI ADR and Allianz SE go up and down completely randomly.
Pair Corralation between ASSGENERALI ADR and Allianz SE
Assuming the 90 days trading horizon ASSGENERALI ADR 12EO is expected to generate 1.77 times more return on investment than Allianz SE. However, ASSGENERALI ADR is 1.77 times more volatile than Allianz SE. It trades about 0.1 of its potential returns per unit of risk. Allianz SE is currently generating about -0.07 per unit of risk. If you would invest 1,290 in ASSGENERALI ADR 12EO on August 25, 2024 and sell it today you would earn a total of 40.00 from holding ASSGENERALI ADR 12EO or generate 3.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
ASSGENERALI ADR 12EO vs. Allianz SE
Performance |
| Timeline |
| ASSGENERALI ADR 12EO |
| Allianz SE |
ASSGENERALI ADR and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASSGENERALI ADR and Allianz SE
The main advantage of trading using opposite ASSGENERALI ADR and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASSGENERALI ADR 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.| ASSGENERALI ADR vs. Allianz SE | ASSGENERALI ADR vs. ALLIANZ SE UNSPADR | ASSGENERALI ADR vs. AXA SA | ASSGENERALI ADR vs. Principal Financial Group |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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