Correlation Between Allianz Technology and FC Investment
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and FC Investment 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 FC Investment 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 FC Investment Trust, you can compare the effects of market volatilities on Allianz Technology and FC Investment 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 FC Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and FC Investment.
Diversification Opportunities for Allianz Technology and FC Investment
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Allianz and FCIT is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and FC Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FC Investment Trust 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 FC Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FC Investment Trust has no effect on the direction of Allianz Technology i.e., Allianz Technology and FC Investment go up and down completely randomly.
Pair Corralation between Allianz Technology and FC Investment
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 2.14 times more return on investment than FC Investment. However, Allianz Technology is 2.14 times more volatile than FC Investment Trust. It trades about 0.27 of its potential returns per unit of risk. FC Investment Trust is currently generating about 0.46 per unit of risk. If you would invest 36,400 in Allianz Technology Trust on September 1, 2024 and sell it today you would earn a total of 3,350 from holding Allianz Technology Trust or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. FC Investment Trust
Performance |
| Timeline |
| Allianz Technology Trust |
| FC Investment Trust |
Allianz Technology and FC Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and FC Investment
The main advantage of trading using opposite Allianz Technology and FC Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, FC Investment 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 FC Investment will offset losses from the drop in FC Investment's long position.| Allianz Technology vs. Games Workshop Group | Allianz Technology vs. Auto Trader Group | Allianz Technology vs. SANTANDER UK 10 | Allianz Technology vs. Coor Service Management |
| FC Investment vs. Toyota Motor Corp | FC Investment vs. SoftBank Group Corp | FC Investment vs. OTP Bank Nyrt | FC Investment vs. Las Vegas Sands |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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