Correlation Between Allianz Technology and Indutrade
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Indutrade 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 Indutrade 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 Indutrade AB, you can compare the effects of market volatilities on Allianz Technology and Indutrade 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 Indutrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Indutrade.
Diversification Opportunities for Allianz Technology and Indutrade
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allianz and Indutrade is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Indutrade AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indutrade AB 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 Indutrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indutrade AB has no effect on the direction of Allianz Technology i.e., Allianz Technology and Indutrade go up and down completely randomly.
Pair Corralation between Allianz Technology and Indutrade
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.08 times more return on investment than Indutrade. However, Allianz Technology is 1.08 times more volatile than Indutrade AB. It trades about 0.15 of its potential returns per unit of risk. Indutrade AB is currently generating about 0.04 per unit of risk. If you would invest 33,700 in Allianz Technology Trust on November 3, 2024 and sell it today you would earn a total of 10,600 from holding Allianz Technology Trust or generate 31.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. Indutrade AB
Performance |
| Timeline |
| Allianz Technology Trust |
| Indutrade AB |
Allianz Technology and Indutrade Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Indutrade
The main advantage of trading using opposite Allianz Technology and Indutrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Indutrade 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 Indutrade will offset losses from the drop in Indutrade's long position.| Allianz Technology vs. Air Products Chemicals | Allianz Technology vs. Gruppo MutuiOnline SpA | Allianz Technology vs. Waste Management | Allianz Technology vs. Amedeo Air Four |
| Indutrade vs. Rheinmetall AG | Indutrade vs. Ross Stores | Indutrade vs. Axway Software SA | Indutrade vs. Jacquet Metal Service |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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