Correlation Between SANTANDER and Allianz Technology
Can any of the company-specific risk be diversified away by investing in both SANTANDER 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 SANTANDER and Allianz Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SANTANDER UK 8 and Allianz Technology Trust, you can compare the effects of market volatilities on SANTANDER 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 SANTANDER with a short position of Allianz Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANTANDER and Allianz Technology.
Diversification Opportunities for SANTANDER and Allianz Technology
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between SANTANDER and Allianz is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding SANTANDER UK 8 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 SANTANDER 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 SANTANDER UK 8 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 SANTANDER i.e., SANTANDER and Allianz Technology go up and down completely randomly.
Pair Corralation between SANTANDER and Allianz Technology
Assuming the 90 days trading horizon SANTANDER is expected to generate 2460.0 times less return on investment than Allianz Technology. But when comparing it to its historical volatility, SANTANDER UK 8 is 11.94 times less risky than Allianz Technology. It trades about 0.0 of its potential returns per unit of risk. Allianz Technology Trust is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 39,300 in Allianz Technology Trust on September 12, 2024 and sell it today you would earn a total of 2,200 from holding Allianz Technology Trust or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SANTANDER UK 8 vs. Allianz Technology Trust
Performance |
| Timeline |
| SANTANDER UK 8 |
| Allianz Technology Trust |
SANTANDER and Allianz Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SANTANDER and Allianz Technology
The main advantage of trading using opposite SANTANDER and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANTANDER 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.| SANTANDER vs. Vulcan Materials Co | SANTANDER vs. Ryanair Holdings plc | SANTANDER vs. Morgan Advanced Materials | SANTANDER vs. Amedeo Air Four |
| Allianz Technology vs. Samsung Electronics Co | Allianz Technology vs. Samsung Electronics Co | Allianz Technology vs. Hyundai Motor | Allianz Technology vs. Toyota Motor Corp |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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