Correlation Between Enstar Group and Allianz SE
Can any of the company-specific risk be diversified away by investing in both Enstar Group and Allianz SE 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 Enstar Group and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enstar Group Limited and Allianz SE, you can compare the effects of market volatilities on Enstar Group and Allianz SE 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 Enstar Group with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enstar Group and Allianz SE.
Diversification Opportunities for Enstar Group and Allianz SE
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enstar and Allianz is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Enstar Group Limited and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and Enstar Group 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 Enstar Group Limited are associated (or correlated) with Allianz SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianz SE has no effect on the direction of Enstar Group i.e., Enstar Group and Allianz SE go up and down completely randomly.
Pair Corralation between Enstar Group and Allianz SE
Given the investment horizon of 90 days Enstar Group Limited is expected to generate 0.18 times more return on investment than Allianz SE. However, Enstar Group Limited is 5.53 times less risky than Allianz SE. It trades about -0.04 of its potential returns per unit of risk. Allianz SE is currently generating about -0.08 per unit of risk. If you would invest 32,530 in Enstar Group Limited on August 24, 2024 and sell it today you would lose (79.00) from holding Enstar Group Limited or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Enstar Group Limited vs. Allianz SE
Performance |
| Timeline |
| Enstar Group Limited |
| Allianz SE |
Enstar Group and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enstar Group and Allianz SE
The main advantage of trading using opposite Enstar Group and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enstar Group position performs unexpectedly, Allianz SE 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 SE will offset losses from the drop in Allianz SE's long position.| Enstar Group vs. Global Indemnity PLC | Enstar Group vs. Erie Indemnity | Enstar Group vs. AMERISAFE | Enstar Group vs. Diamond Hill Investment |
| Allianz SE vs. Assicurazioni Generali SpA | Allianz SE vs. ageas SANV | Allianz SE vs. AXA SA | Allianz SE vs. Sampo OYJ |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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