Correlation Between Cornish Metals and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both Cornish Metals and Allianz Technology 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 Cornish Metals and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cornish Metals and Allianz Technology Trust, you can compare the effects of market volatilities on Cornish Metals and Allianz Technology 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 Cornish Metals with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cornish Metals and Allianz Technology.
Diversification Opportunities for Cornish Metals and Allianz Technology
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cornish and Allianz is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cornish Metals and Allianz Technology Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz Technology Trust and Cornish Metals 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 Cornish Metals are associated (or correlated) with Allianz Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz Technology Trust has no effect on the direction of Cornish Metals i.e., Cornish Metals and Allianz Technology go up and down completely randomly.
Pair Corralation between Cornish Metals and Allianz Technology
Assuming the 90 days trading horizon Cornish Metals is expected to under-perform the Allianz Technology. In addition to that, Cornish Metals is 2.15 times more volatile than Allianz Technology Trust. It trades about -0.01 of its total potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.08 per unit of volatility. If you would invest 23,650 in Allianz Technology Trust on November 6, 2024 and sell it today you would earn a total of 19,250 from holding Allianz Technology Trust or generate 81.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cornish Metals vs. Allianz Technology Trust
Performance |
| Timeline |
| Cornish Metals |
| Allianz Technology Trust |
Cornish Metals and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cornish Metals and Allianz Technology
The main advantage of trading using opposite Cornish Metals and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cornish Metals position performs unexpectedly, Allianz Technology 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 Allianz Technology will offset losses from the drop in Allianz Technology's long position.| Cornish Metals vs. Sealed Air Corp | Cornish Metals vs. Endeavour Mining Corp | Cornish Metals vs. Eastinco Mining Exploration | Cornish Metals vs. Coeur Mining |
| Allianz Technology vs. Hecla Mining Co | Allianz Technology vs. Invesco Physical Silver | Allianz Technology vs. AfriTin Mining | Allianz Technology vs. European Metals Holdings |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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