Correlation Between Allianz Technology and AB SKF
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and AB SKF 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 AB SKF 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 AB SKF B, you can compare the effects of market volatilities on Allianz Technology and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and AB SKF.
Diversification Opportunities for Allianz Technology and AB SKF
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Allianz and 0NWX is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and AB SKF B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF B 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF B has no effect on the direction of Allianz Technology i.e., Allianz Technology and AB SKF go up and down completely randomly.
Pair Corralation between Allianz Technology and AB SKF
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.02 times more return on investment than AB SKF. However, Allianz Technology is 1.02 times more volatile than AB SKF B. It trades about 0.06 of its potential returns per unit of risk. AB SKF B is currently generating about -0.02 per unit of risk. If you would invest 36,500 in Allianz Technology Trust on September 4, 2024 and sell it today you would earn a total of 4,050 from holding Allianz Technology Trust or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. AB SKF B
Performance |
| Timeline |
| Allianz Technology Trust |
| AB SKF B |
Allianz Technology and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and AB SKF
The main advantage of trading using opposite Allianz Technology and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF's long position.| Allianz Technology vs. SupplyMe Capital PLC | Allianz Technology vs. Lloyds Banking Group | Allianz Technology vs. Premier African Minerals | Allianz Technology vs. SANTANDER UK 8 |
| AB SKF vs. Grieg Seafood | AB SKF vs. Auction Technology Group | AB SKF vs. Allianz Technology Trust | AB SKF vs. Hilton Food 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 CEOs Directory module to screen CEOs from public companies around the world.
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