Correlation Between Allianz Technology and K3 Business
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and K3 Business 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 K3 Business 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 K3 Business Technology, you can compare the effects of market volatilities on Allianz Technology and K3 Business 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 K3 Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and K3 Business.
Diversification Opportunities for Allianz Technology and K3 Business
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allianz and KBT is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and K3 Business Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K3 Business 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 K3 Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K3 Business Technology has no effect on the direction of Allianz Technology i.e., Allianz Technology and K3 Business go up and down completely randomly.
Pair Corralation between Allianz Technology and K3 Business
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 1.13 times more return on investment than K3 Business. However, Allianz Technology is 1.13 times more volatile than K3 Business Technology. It trades about 0.15 of its potential returns per unit of risk. K3 Business Technology is currently generating about -0.14 per unit of risk. If you would invest 37,400 in Allianz Technology Trust on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Allianz Technology Trust or generate 5.35% 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. K3 Business Technology
Performance |
| Timeline |
| Allianz Technology Trust |
| K3 Business Technology |
Allianz Technology and K3 Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and K3 Business
The main advantage of trading using opposite Allianz Technology and K3 Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, K3 Business 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 K3 Business will offset losses from the drop in K3 Business' long position.| Allianz Technology vs. Host Hotels Resorts | Allianz Technology vs. Microchip Technology | Allianz Technology vs. Polar Capital Technology | Allianz Technology vs. Spotify Technology SA |
| K3 Business vs. Rockfire Resources plc | K3 Business vs. Ikigai Ventures | K3 Business vs. Falcon Oil Gas | K3 Business vs. Helium One Global |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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