Correlation Between Prologis and Allianz SE
Can any of the company-specific risk be diversified away by investing in both Prologis 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 Prologis and Allianz SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prologis and Allianz SE, you can compare the effects of market volatilities on Prologis 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 Prologis with a short position of Allianz SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and Allianz SE.
Diversification Opportunities for Prologis and Allianz SE
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prologis and Allianz is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and Allianz SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianz SE and Prologis 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 Prologis 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 Prologis i.e., Prologis and Allianz SE go up and down completely randomly.
Pair Corralation between Prologis and Allianz SE
Considering the 90-day investment horizon Prologis is expected to under-perform the Allianz SE. But the stock apears to be less risky and, when comparing its historical volatility, Prologis is 1.25 times less risky than Allianz SE. The stock trades about -0.24 of its potential returns per unit of risk. The Allianz SE is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 34,225 in Allianz SE on December 16, 2024 and sell it today you would earn a total of 4,375 from holding Allianz SE or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prologis vs. Allianz SE
Performance |
| Timeline |
| Prologis |
| Allianz SE |
Prologis and Allianz SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prologis and Allianz SE
The main advantage of trading using opposite Prologis and Allianz SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prologis 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.| Prologis vs. Plymouth Industrial REIT | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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