Correlation Between Allianz Technology and Fannie Mae
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Fannie Mae 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 Fannie Mae 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 Fannie Mae, you can compare the effects of market volatilities on Allianz Technology and Fannie Mae 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 Fannie Mae. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Fannie Mae.
Diversification Opportunities for Allianz Technology and Fannie Mae
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allianz and Fannie is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Fannie Mae in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fannie Mae 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 Fannie Mae. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fannie Mae has no effect on the direction of Allianz Technology i.e., Allianz Technology and Fannie Mae go up and down completely randomly.
Pair Corralation between Allianz Technology and Fannie Mae
Assuming the 90 days trading horizon Allianz Technology is expected to generate 7.58 times less return on investment than Fannie Mae. But when comparing it to its historical volatility, Allianz Technology Trust is 7.18 times less risky than Fannie Mae. It trades about 0.18 of its potential returns per unit of risk. Fannie Mae is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Fannie Mae on September 21, 2024 and sell it today you would earn a total of 120.00 from holding Fannie Mae or generate 82.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 90.91% |
| Values | Daily Returns |
Allianz Technology Trust vs. Fannie Mae
Performance |
| Timeline |
| Allianz Technology Trust |
| Fannie Mae |
Allianz Technology and Fannie Mae Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Fannie Mae
The main advantage of trading using opposite Allianz Technology and Fannie Mae positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Fannie Mae 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 Fannie Mae will offset losses from the drop in Fannie Mae's long position.| Allianz Technology vs. Metals Exploration Plc | Allianz Technology vs. European Metals Holdings | Allianz Technology vs. Invesco Physical Silver | Allianz Technology vs. Anglesey Mining |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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