Correlation Between Allianz Technology and Craven House
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Craven House 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 Craven House 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 Craven House Capital, you can compare the effects of market volatilities on Allianz Technology and Craven House 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 Craven House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Craven House.
Diversification Opportunities for Allianz Technology and Craven House
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Allianz and Craven is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Craven House Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Craven House Capital 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 Craven House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Craven House Capital has no effect on the direction of Allianz Technology i.e., Allianz Technology and Craven House go up and down completely randomly.
Pair Corralation between Allianz Technology and Craven House
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.82 times more return on investment than Craven House. However, Allianz Technology Trust is 1.21 times less risky than Craven House. It trades about 0.27 of its potential returns per unit of risk. Craven House Capital is currently generating about 0.22 per unit of risk. If you would invest 36,700 in Allianz Technology Trust on September 4, 2024 and sell it today you would earn a total of 3,500 from holding Allianz Technology Trust or generate 9.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Allianz Technology Trust vs. Craven House Capital
Performance |
| Timeline |
| Allianz Technology Trust |
| Craven House Capital |
Allianz Technology and Craven House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and Craven House
The main advantage of trading using opposite Allianz Technology and Craven House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Craven House 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 Craven House will offset losses from the drop in Craven House'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 |
| Craven House vs. Playtech Plc | Craven House vs. Allianz Technology Trust | Craven House vs. AIM ImmunoTech | Craven House vs. Live Nation Entertainment |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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