Correlation Between HAMMONIA Schiffsholding and Allianz SE
Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAMMONIA Schiffsholding AG and Allianz SE VNA, you can compare the effects of market volatilities on HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and Allianz SE.
Diversification Opportunities for HAMMONIA Schiffsholding and Allianz SE
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HAMMONIA and Allianz is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and Allianz SE VNA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE VNA and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG 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 VNA has no effect on the direction of HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and Allianz SE go up and down completely randomly.
Pair Corralation between HAMMONIA Schiffsholding and Allianz SE
Assuming the 90 days trading horizon HAMMONIA Schiffsholding is expected to generate 1.7 times less return on investment than Allianz SE. In addition to that, HAMMONIA Schiffsholding is 2.83 times more volatile than Allianz SE VNA. It trades about 0.02 of its total potential returns per unit of risk. Allianz SE VNA is currently generating about 0.1 per unit of volatility. If you would invest 18,372 in Allianz SE VNA on September 4, 2024 and sell it today you would earn a total of 11,278 from holding Allianz SE VNA or generate 61.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
HAMMONIA Schiffsholding AG vs. Allianz SE VNA
Performance |
| Timeline |
| HAMMONIA Schiffsholding |
| Allianz SE VNA |
HAMMONIA Schiffsholding and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAMMONIA Schiffsholding and Allianz SE
The main advantage of trading using opposite HAMMONIA Schiffsholding and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding 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.The idea behind HAMMONIA Schiffsholding AG and Allianz SE VNA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Allianz SE vs. Berkshire Hathaway | Allianz SE vs. AXA SA | Allianz SE vs. AXA SA | Allianz SE vs. The Hartford Financial |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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