Correlation Between Allianz Technology and BW Offshore
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and BW Offshore 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 BW Offshore 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 BW Offshore, you can compare the effects of market volatilities on Allianz Technology and BW Offshore 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 BW Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and BW Offshore.
Diversification Opportunities for Allianz Technology and BW Offshore
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Allianz and 0RKH is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and BW Offshore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW Offshore 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 BW Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW Offshore has no effect on the direction of Allianz Technology i.e., Allianz Technology and BW Offshore go up and down completely randomly.
Pair Corralation between Allianz Technology and BW Offshore
Assuming the 90 days trading horizon Allianz Technology is expected to generate 1.0 times less return on investment than BW Offshore. But when comparing it to its historical volatility, Allianz Technology Trust is 1.36 times less risky than BW Offshore. It trades about 0.05 of its potential returns per unit of risk. BW Offshore is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,571 in BW Offshore on September 3, 2024 and sell it today you would earn a total of 217.00 from holding BW Offshore or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.62% |
| Values | Daily Returns |
Allianz Technology Trust vs. BW Offshore
Performance |
| Timeline |
| Allianz Technology Trust |
| BW Offshore |
Allianz Technology and BW Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and BW Offshore
The main advantage of trading using opposite Allianz Technology and BW Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, BW Offshore 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 BW Offshore will offset losses from the drop in BW Offshore's long position.| Allianz Technology vs. Wheaton Precious Metals | Allianz Technology vs. Silvercorp Metals | Allianz Technology vs. Air Products Chemicals | Allianz Technology vs. Melia Hotels |
| BW Offshore vs. Catalyst Media Group | BW Offshore vs. CATLIN GROUP | BW Offshore vs. Magnora ASA | BW Offshore vs. RTW Venture Fund |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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