Correlation Between NN Group and ALLIANZ SE

Can any of the company-specific risk be diversified away by investing in both NN Group 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 NN Group and ALLIANZ SE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NN Group NV and ALLIANZ SE UNSPADR, you can compare the effects of market volatilities on NN Group 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 NN Group with a short position of ALLIANZ SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NN Group and ALLIANZ SE.

Diversification Opportunities for NN Group and ALLIANZ SE

0.11

Correlation Coefficient

NN Group  ALLIANZ SE

Average diversification

The 3 months correlation between 2NN and ALLIANZ is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NN Group NV and ALLIANZ SE UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLIANZ SE UNSPADR and NN Group 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 NN Group NV 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 UNSPADR has no effect on the direction of NN Group i.e., NN Group and ALLIANZ SE go up and down completely randomly.

Pair Corralation between NN Group and ALLIANZ SE

Assuming the 90 days horizon NN Group NV is expected to generate 0.62 times more return on investment than ALLIANZ SE. However, NN Group NV is 1.62 times less risky than ALLIANZ SE. It trades about 0.22 of its potential returns per unit of risk. ALLIANZ SE UNSPADR is currently generating about 0.01 per unit of risk. If you would invest  5,048  in NN Group NV on April 23, 2025 and sell it today you would earn a total of  696.00  from holding NN Group NV or generate 13.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NN Group NV  vs.  ALLIANZ SE UNSPADR

NN Group NV

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NN Group NV are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, NN Group reported solid returns over the last few months and may actually be approaching a breakup point.

ALLIANZ SE UNSPADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days ALLIANZ SE UNSPADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ALLIANZ SE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NN Group and ALLIANZ SE

The main advantage of trading using opposite NN Group and ALLIANZ SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NN Group 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 NN Group NV and ALLIANZ SE UNSPADR 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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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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.