Correlation Between Allianz Technology and British American
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and British American 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 Technology and British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allianz Technology Trust and British American Tobacco, you can compare the effects of market volatilities on Allianz Technology and British American 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 Technology with a short position of British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and British American.
Diversification Opportunities for Allianz Technology and British American
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianz and British is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco and Allianz Technology 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 Technology Trust are associated (or correlated) with British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of Allianz Technology i.e., Allianz Technology and British American go up and down completely randomly.
Pair Corralation between Allianz Technology and British American
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.76 times more return on investment than British American. However, Allianz Technology Trust is 1.32 times less risky than British American. It trades about 0.09 of its potential returns per unit of risk. British American Tobacco is currently generating about 0.02 per unit of risk. If you would invest 21,250 in Allianz Technology Trust on September 19, 2024 and sell it today you would earn a total of 20,900 from holding Allianz Technology Trust or generate 98.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Allianz Technology Trust vs. British American Tobacco
Performance |
| Timeline |
| Allianz Technology Trust |
| British American Tobacco |
Allianz Technology and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and British American
The main advantage of trading using opposite Allianz Technology and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| Allianz Technology vs. Catalyst Media Group | Allianz Technology vs. CATLIN GROUP | Allianz Technology vs. Tamburi Investment Partners | Allianz Technology vs. Magnora ASA |
| British American vs. Ocean Harvest Technology | British American vs. Allianz Technology Trust | British American vs. Auction Technology Group | British American vs. Cognizant Technology Solutions |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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