Correlation Between Allianz Technology and Solstad Offshore
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Solstad Offshore 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 Solstad Offshore 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 Solstad Offshore ASA, you can compare the effects of market volatilities on Allianz Technology and Solstad Offshore 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 Solstad Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Solstad Offshore.
Diversification Opportunities for Allianz Technology and Solstad Offshore
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allianz and Solstad is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Solstad Offshore ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solstad Offshore ASA 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 Solstad Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solstad Offshore ASA has no effect on the direction of Allianz Technology i.e., Allianz Technology and Solstad Offshore go up and down completely randomly.
Pair Corralation between Allianz Technology and Solstad Offshore
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.46 times more return on investment than Solstad Offshore. However, Allianz Technology Trust is 2.16 times less risky than Solstad Offshore. It trades about 0.08 of its potential returns per unit of risk. Solstad Offshore ASA is currently generating about 0.03 per unit of risk. If you would invest 22,800 in Allianz Technology Trust on August 24, 2024 and sell it today you would earn a total of 17,000 from holding Allianz Technology Trust or generate 74.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Allianz Technology Trust vs. Solstad Offshore ASA
Performance |
| Timeline |
| Allianz Technology Trust |
| Solstad Offshore ASA |
Allianz Technology and Solstad Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Solstad Offshore
The main advantage of trading using opposite Allianz Technology and Solstad Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Solstad Offshore 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 Solstad Offshore will offset losses from the drop in Solstad Offshore's long position.| Allianz Technology vs. Home Depot | Allianz Technology vs. River and Mercantile | Allianz Technology vs. Chrysalis Investments | Allianz Technology vs. Sherborne Investors Guernsey |
| Solstad Offshore vs. Quadrise Plc | Solstad Offshore vs. Intuitive Investments Group | Solstad Offshore vs. European Metals Holdings | Solstad Offshore vs. Athelney Trust plc |
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 Stocks Directory module to find actively traded stocks across global markets.
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