Correlation Between Allianz Technology and NCC Group
Can any of the company-specific risk be diversified away by investing in both Allianz Technology and NCC Group 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 NCC Group 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 NCC Group plc, you can compare the effects of market volatilities on Allianz Technology and NCC Group 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 NCC Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and NCC Group.
Diversification Opportunities for Allianz Technology and NCC Group
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Allianz and NCC is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and NCC Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCC Group 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 NCC Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCC Group plc has no effect on the direction of Allianz Technology i.e., Allianz Technology and NCC Group go up and down completely randomly.
Pair Corralation between Allianz Technology and NCC Group
Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.5 times more return on investment than NCC Group. However, Allianz Technology Trust is 1.99 times less risky than NCC Group. It trades about 0.24 of its potential returns per unit of risk. NCC Group plc is currently generating about -0.11 per unit of risk. If you would invest 34,950 in Allianz Technology Trust on September 20, 2024 and sell it today you would earn a total of 7,550 from holding Allianz Technology Trust or generate 21.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allianz Technology Trust vs. NCC Group plc
Performance |
| Timeline |
| Allianz Technology Trust |
| NCC Group plc |
Allianz Technology and NCC Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allianz Technology and NCC Group
The main advantage of trading using opposite Allianz Technology and NCC Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, NCC Group 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 NCC Group will offset losses from the drop in NCC Group'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 |
| NCC Group vs. SupplyMe Capital PLC | NCC Group vs. Lloyds Banking Group | NCC Group vs. Premier African Minerals | NCC Group vs. SANTANDER UK 8 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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