Correlation Between Allianz Technology and Fresenius Medical
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Fresenius Medical 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 Fresenius Medical 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 Fresenius Medical Care, you can compare the effects of market volatilities on Allianz Technology and Fresenius Medical 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 Fresenius Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Fresenius Medical.
Diversification Opportunities for Allianz Technology and Fresenius Medical
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and Fresenius is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Fresenius Medical Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius Medical Care 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 Fresenius Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius Medical Care has no effect on the direction of Allianz Technology i.e., Allianz Technology and Fresenius Medical go up and down completely randomly.
Pair Corralation between Allianz Technology and Fresenius Medical
Assuming the 90 days trading horizon Allianz Technology is expected to generate 1.52 times less return on investment than Fresenius Medical. In addition to that, Allianz Technology is 1.01 times more volatile than Fresenius Medical Care. It trades about 0.25 of its total potential returns per unit of risk. Fresenius Medical Care is currently generating about 0.38 per unit of volatility. If you would invest 3,656 in Fresenius Medical Care on September 2, 2024 and sell it today you would earn a total of 495.00 from holding Fresenius Medical Care or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. Fresenius Medical Care
Performance |
| Timeline |
| Allianz Technology Trust |
| Fresenius Medical Care |
Allianz Technology and Fresenius Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Fresenius Medical
The main advantage of trading using opposite Allianz Technology and Fresenius Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Fresenius Medical 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 Fresenius Medical will offset losses from the drop in Fresenius Medical's long position.| Allianz Technology vs. Toyota Motor Corp | Allianz Technology vs. SoftBank Group Corp | Allianz Technology vs. OTP Bank Nyrt | Allianz Technology vs. Las Vegas Sands |
| Fresenius Medical vs. Uniper SE | Fresenius Medical vs. Mulberry Group PLC | Fresenius Medical vs. London Security Plc | Fresenius Medical vs. Triad Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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