Correlation Between Allianz Technology and Ashtead Technology
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Ashtead Technology 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 Ashtead Technology 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 Ashtead Technology Holdings, you can compare the effects of market volatilities on Allianz Technology and Ashtead Technology 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 Ashtead Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Ashtead Technology.
Diversification Opportunities for Allianz Technology and Ashtead Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Allianz and Ashtead is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Ashtead Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashtead Technology 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 Ashtead Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashtead Technology has no effect on the direction of Allianz Technology i.e., Allianz Technology and Ashtead Technology go up and down completely randomly.
Pair Corralation between Allianz Technology and Ashtead Technology
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.47 times more return on investment than Ashtead Technology. However, Allianz Technology Trust is 2.12 times less risky than Ashtead Technology. It trades about 0.15 of its potential returns per unit of risk. Ashtead Technology Holdings is currently generating about -0.07 per unit of risk. If you would invest 33,700 in Allianz Technology Trust on November 3, 2024 and sell it today you would earn a total of 10,600 from holding Allianz Technology Trust or generate 31.45% 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. Ashtead Technology Holdings
Performance |
| Timeline |
| Allianz Technology Trust |
| Ashtead Technology |
Allianz Technology and Ashtead Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Ashtead Technology
The main advantage of trading using opposite Allianz Technology and Ashtead Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Ashtead Technology 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 Ashtead Technology will offset losses from the drop in Ashtead Technology's long position.| Allianz Technology vs. Air Products Chemicals | Allianz Technology vs. Gruppo MutuiOnline SpA | Allianz Technology vs. Waste Management | Allianz Technology vs. Amedeo Air Four |
| Ashtead Technology vs. Ebro Foods | Ashtead Technology vs. URU Metals | Ashtead Technology vs. Endeavour Mining Corp | Ashtead Technology vs. Empire Metals Limited |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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