Correlation Between Allianz Technology and Cairo Communication

Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Cairo Communication 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 Technology and Cairo Communication into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Allianz Technology Trust and Cairo Communication SpA, you can compare the effects of market volatilities on Allianz Technology and Cairo Communication 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 Technology with a short position of Cairo Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Cairo Communication.

Diversification Opportunities for Allianz Technology and Cairo Communication

0.18

Correlation Coefficient

Allianz Technology  Cairo Communication

Average diversification

The 3 months correlation between Allianz and Cairo is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Cairo Communication SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cairo Communication SpA and Allianz Technology 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 Technology Trust are associated (or correlated) with Cairo Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cairo Communication SpA has no effect on the direction of Allianz Technology i.e., Allianz Technology and Cairo Communication go up and down completely randomly.

Pair Corralation between Allianz Technology and Cairo Communication

Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.87 times more return on investment than Cairo Communication. However, Allianz Technology Trust is 1.15 times less risky than Cairo Communication. It trades about 0.34 of its potential returns per unit of risk. Cairo Communication SpA is currently generating about -0.01 per unit of risk. If you would invest  32,500  in Allianz Technology Trust on April 17, 2025 and sell it today you would earn a total of  11,650  from holding Allianz Technology Trust or generate 35.85% return on investment over 90 days.

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

Allianz Technology Trust  vs.  Cairo Communication SpA

Allianz Technology Trust

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Allianz Technology Trust are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Allianz Technology exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cairo Communication SpA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cairo Communication SpA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cairo Communication is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Allianz Technology and Cairo Communication

The main advantage of trading using opposite Allianz Technology and Cairo Communication positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianz Technology position performs unexpectedly, Cairo Communication 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 Cairo Communication will offset losses from the drop in Cairo Communication's long position.

The idea behind Allianz Technology Trust and Cairo Communication SpA 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.