Correlation Between Deutsche Lufthansa and Allianz SE
Can any of the company-specific risk be diversified away by investing in both Deutsche Lufthansa 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 Deutsche Lufthansa and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Lufthansa AG and Allianz SE, you can compare the effects of market volatilities on Deutsche Lufthansa 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 Deutsche Lufthansa with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Lufthansa and Allianz SE.
Diversification Opportunities for Deutsche Lufthansa and Allianz SE
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and Allianz is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Lufthansa AG and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and Deutsche Lufthansa 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 Deutsche Lufthansa 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 has no effect on the direction of Deutsche Lufthansa i.e., Deutsche Lufthansa and Allianz SE go up and down completely randomly.
Pair Corralation between Deutsche Lufthansa and Allianz SE
Assuming the 90 days horizon Deutsche Lufthansa AG is expected to under-perform the Allianz SE. In addition to that, Deutsche Lufthansa is 1.93 times more volatile than Allianz SE. It trades about -0.03 of its total potential returns per unit of risk. Allianz SE is currently generating about 0.1 per unit of volatility. If you would invest 19,847 in Allianz SE on November 1, 2024 and sell it today you would earn a total of 11,593 from holding Allianz SE or generate 58.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Deutsche Lufthansa AG vs. Allianz SE
Performance |
| Timeline |
| Deutsche Lufthansa |
| Allianz SE |
Deutsche Lufthansa and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Lufthansa and Allianz SE
The main advantage of trading using opposite Deutsche Lufthansa and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Lufthansa 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.| Deutsche Lufthansa vs. Delta Air Lines | Deutsche Lufthansa vs. Air China Limited | Deutsche Lufthansa vs. AIR CHINA LTD | Deutsche Lufthansa vs. RYANAIR HLDGS ADR |
| Allianz SE vs. Xinhua Winshare Publishing | Allianz SE vs. STRAYER EDUCATION | Allianz SE vs. Grupo Carso SAB | Allianz SE vs. Granite Construction |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |