Correlation Between Allianz Technology and Eiffage SA
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Eiffage SA 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 Eiffage SA 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 Eiffage SA, you can compare the effects of market volatilities on Allianz Technology and Eiffage SA 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 Eiffage SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Eiffage SA.
Diversification Opportunities for Allianz Technology and Eiffage SA
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allianz and Eiffage is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Eiffage SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eiffage SA 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 Eiffage SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eiffage SA has no effect on the direction of Allianz Technology i.e., Allianz Technology and Eiffage SA go up and down completely randomly.
Pair Corralation between Allianz Technology and Eiffage SA
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.16 times more return on investment than Eiffage SA. However, Allianz Technology is 1.16 times more volatile than Eiffage SA. It trades about 0.06 of its potential returns per unit of risk. Eiffage SA is currently generating about -0.09 per unit of risk. If you would invest 35,000 in Allianz Technology Trust on September 1, 2024 and sell it today you would earn a total of 4,750 from holding Allianz Technology Trust or generate 13.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Allianz Technology Trust vs. Eiffage SA
Performance |
| Timeline |
| Allianz Technology Trust |
| Eiffage SA |
Allianz Technology and Eiffage SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Eiffage SA
The main advantage of trading using opposite Allianz Technology and Eiffage SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Eiffage SA 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 Eiffage SA will offset losses from the drop in Eiffage SA's long position.| Allianz Technology vs. Games Workshop Group | Allianz Technology vs. Auto Trader Group | Allianz Technology vs. SANTANDER UK 10 | Allianz Technology vs. Coor Service Management |
| Eiffage SA vs. Uniper SE | Eiffage SA vs. Mulberry Group PLC | Eiffage SA vs. London Security Plc | Eiffage SA 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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