Correlation Between ALLIANZ TECHNOTRLS-025 and Erste Group
Can any of the company-specific risk be diversified away by investing in both ALLIANZ TECHNOTRLS-025 and Erste Group 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 ALLIANZ TECHNOTRLS-025 and Erste Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALLIANZ TECHNOTRLS 025 and Erste Group Bank, you can compare the effects of market volatilities on ALLIANZ TECHNOTRLS-025 and Erste Group 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 ALLIANZ TECHNOTRLS-025 with a short position of Erste Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLIANZ TECHNOTRLS-025 and Erste Group.
Diversification Opportunities for ALLIANZ TECHNOTRLS-025 and Erste Group
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between ALLIANZ and Erste is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding ALLIANZ TECHNOTRLS 025 and Erste Group Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Erste Group Bank and ALLIANZ TECHNOTRLS-025 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 ALLIANZ TECHNOTRLS 025 are associated (or correlated) with Erste Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Erste Group Bank has no effect on the direction of ALLIANZ TECHNOTRLS-025 i.e., ALLIANZ TECHNOTRLS-025 and Erste Group go up and down completely randomly.
Pair Corralation between ALLIANZ TECHNOTRLS-025 and Erste Group
Assuming the 90 days horizon ALLIANZ TECHNOTRLS 025 is expected to generate 0.91 times more return on investment than Erste Group. However, ALLIANZ TECHNOTRLS 025 is 1.09 times less risky than Erste Group. It trades about 0.3 of its potential returns per unit of risk. Erste Group Bank is currently generating about 0.21 per unit of risk. If you would invest 378.00 in ALLIANZ TECHNOTRLS 025 on April 23, 2025 and sell it today you would earn a total of 137.00 from holding ALLIANZ TECHNOTRLS 025 or generate 36.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
ALLIANZ TECHNOTRLS 025 vs. Erste Group Bank
Performance |
Timeline |
ALLIANZ TECHNOTRLS 025 |
Erste Group Bank |
ALLIANZ TECHNOTRLS-025 and Erste Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ALLIANZ TECHNOTRLS-025 and Erste Group
The main advantage of trading using opposite ALLIANZ TECHNOTRLS-025 and Erste Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLIANZ TECHNOTRLS-025 position performs unexpectedly, Erste Group 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 Erste Group will offset losses from the drop in Erste Group's long position.The idea behind ALLIANZ TECHNOTRLS 025 and Erste Group Bank 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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