Correlation Between Allianz Technology and Balfour Beatty
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Balfour Beatty 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 Balfour Beatty 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 Balfour Beatty plc, you can compare the effects of market volatilities on Allianz Technology and Balfour Beatty 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 Balfour Beatty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Balfour Beatty.
Diversification Opportunities for Allianz Technology and Balfour Beatty
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and Balfour is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Balfour Beatty plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balfour Beatty plc 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 Balfour Beatty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balfour Beatty plc has no effect on the direction of Allianz Technology i.e., Allianz Technology and Balfour Beatty go up and down completely randomly.
Pair Corralation between Allianz Technology and Balfour Beatty
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.19 times more return on investment than Balfour Beatty. However, Allianz Technology is 1.19 times more volatile than Balfour Beatty plc. It trades about 0.17 of its potential returns per unit of risk. Balfour Beatty plc is currently generating about 0.12 per unit of risk. If you would invest 37,450 in Allianz Technology Trust on September 13, 2024 and sell it today you would earn a total of 4,050 from holding Allianz Technology Trust or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. Balfour Beatty plc
Performance |
| Timeline |
| Allianz Technology Trust |
| Balfour Beatty plc |
Allianz Technology and Balfour Beatty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Balfour Beatty
The main advantage of trading using opposite Allianz Technology and Balfour Beatty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Balfour Beatty 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 Balfour Beatty will offset losses from the drop in Balfour Beatty's long position.| Allianz Technology vs. Catalyst Media Group | Allianz Technology vs. CATLIN GROUP | Allianz Technology vs. Tamburi Investment Partners | Allianz Technology vs. Magnora ASA |
| Balfour Beatty vs. Silvercorp Metals | Balfour Beatty vs. Hochschild Mining plc | Balfour Beatty vs. United States Steel | Balfour Beatty vs. Ironveld 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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