Correlation Between Allianz Technology and Electronic Arts
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Electronic Arts 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 Electronic Arts 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 Electronic Arts, you can compare the effects of market volatilities on Allianz Technology and Electronic Arts 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 Electronic Arts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Electronic Arts.
Diversification Opportunities for Allianz Technology and Electronic Arts
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Allianz and Electronic is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Electronic Arts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Arts 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 Electronic Arts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Arts has no effect on the direction of Allianz Technology i.e., Allianz Technology and Electronic Arts go up and down completely randomly.
Pair Corralation between Allianz Technology and Electronic Arts
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.46 times more return on investment than Electronic Arts. However, Allianz Technology Trust is 2.19 times less risky than Electronic Arts. It trades about 0.19 of its potential returns per unit of risk. Electronic Arts is currently generating about -0.27 per unit of risk. If you would invest 40,400 in Allianz Technology Trust on October 26, 2024 and sell it today you would earn a total of 4,050 from holding Allianz Technology Trust or generate 10.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. Electronic Arts
Performance |
| Timeline |
| Allianz Technology Trust |
| Electronic Arts |
Allianz Technology and Electronic Arts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Electronic Arts
The main advantage of trading using opposite Allianz Technology and Electronic Arts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Electronic Arts 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 Electronic Arts will offset losses from the drop in Electronic Arts' long position.| Allianz Technology vs. SupplyMe Capital PLC | Allianz Technology vs. Premier African Minerals | Allianz Technology vs. SANTANDER UK 8 | Allianz Technology vs. Tower Resources plc |
| Electronic Arts vs. International Biotechnology Trust | Electronic Arts vs. Oxford Technology 2 | Electronic Arts vs. Allianz Technology Trust | Electronic Arts vs. Xeros Technology Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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