Correlation Between Allianz Technology and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on Allianz Technology and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and LPKF Laser.
Diversification Opportunities for Allianz Technology and LPKF Laser
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Allianz and LPKF is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of Allianz Technology i.e., Allianz Technology and LPKF Laser go up and down completely randomly.
Pair Corralation between Allianz Technology and LPKF Laser
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 2.56 times more return on investment than LPKF Laser. However, Allianz Technology is 2.56 times more volatile than LPKF Laser Electronics. It trades about 0.17 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.11 per unit of risk. If you would invest 37,500 in Allianz Technology Trust on August 31, 2024 and sell it today you would earn a total of 2,300 from holding Allianz Technology Trust or generate 6.13% 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. LPKF Laser Electronics
Performance |
| Timeline |
| Allianz Technology Trust |
| LPKF Laser Electronics |
Allianz Technology and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and LPKF Laser
The main advantage of trading using opposite Allianz Technology and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| Allianz Technology vs. DXC Technology Co | Allianz Technology vs. International Biotechnology Trust | Allianz Technology vs. Bytes Technology | Allianz Technology vs. Ashtead Technology Holdings |
| LPKF Laser vs. Neometals | LPKF Laser vs. Coor Service Management | LPKF Laser vs. Aeorema Communications Plc | LPKF Laser vs. JLEN Environmental Assets |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |