Correlation Between Plazza AG and Allreal Holding

Can any of the company-specific risk be diversified away by investing in both Plazza AG and Allreal Holding 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 Plazza AG and Allreal Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Plazza AG and Allreal Holding, you can compare the effects of market volatilities on Plazza AG and Allreal Holding 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 Plazza AG with a short position of Allreal Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plazza AG and Allreal Holding.

Diversification Opportunities for Plazza AG and Allreal Holding

0.61

Correlation Coefficient

Plazza AG  Allreal Holding

Poor diversification

The 3 months correlation between Plazza and Allreal is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Plazza AG and Allreal Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allreal Holding and Plazza AG 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 Plazza AG are associated (or correlated) with Allreal Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allreal Holding has no effect on the direction of Plazza AG i.e., Plazza AG and Allreal Holding go up and down completely randomly.

Pair Corralation between Plazza AG and Allreal Holding

Assuming the 90 days trading horizon Plazza AG is expected to generate 0.64 times more return on investment than Allreal Holding. However, Plazza AG is 1.56 times less risky than Allreal Holding. It trades about 0.4 of its potential returns per unit of risk. Allreal Holding is currently generating about 0.03 per unit of risk. If you would invest  35,400  in Plazza AG on April 22, 2025 and sell it today you would earn a total of  4,400  from holding Plazza AG or generate 12.43% return on investment over 90 days.

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

Plazza AG  vs.  Allreal Holding

Plazza AG

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Plazza AG are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Plazza AG may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Allreal Holding

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Allreal Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Allreal Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Plazza AG and Allreal Holding

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

The idea behind Plazza AG and Allreal Holding 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.