Correlation Between Allianz Technology and Caledonia Mining
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Caledonia Mining 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 Caledonia Mining 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 Caledonia Mining, you can compare the effects of market volatilities on Allianz Technology and Caledonia Mining 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 Caledonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Caledonia Mining.
Diversification Opportunities for Allianz Technology and Caledonia Mining
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allianz and Caledonia is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Caledonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caledonia Mining 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 Caledonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caledonia Mining has no effect on the direction of Allianz Technology i.e., Allianz Technology and Caledonia Mining go up and down completely randomly.
Pair Corralation between Allianz Technology and Caledonia Mining
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.48 times more return on investment than Caledonia Mining. However, Allianz Technology is 1.48 times more volatile than Caledonia Mining. It trades about 0.13 of its potential returns per unit of risk. Caledonia Mining is currently generating about -0.03 per unit of risk. If you would invest 42,300 in Allianz Technology Trust on November 3, 2024 and sell it today you would earn a total of 2,000 from holding Allianz Technology Trust or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. Caledonia Mining
Performance |
| Timeline |
| Allianz Technology Trust |
| Caledonia Mining |
Allianz Technology and Caledonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Caledonia Mining
The main advantage of trading using opposite Allianz Technology and Caledonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Caledonia Mining 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 Caledonia Mining will offset losses from the drop in Caledonia Mining'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 |
| Caledonia Mining vs. AMG Advanced Metallurgical | Caledonia Mining vs. First Class Metals | Caledonia Mining vs. Silvercorp Metals | Caledonia Mining vs. Science in Sport |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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