Correlation Between X FAB and Allianz Technology

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

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

Diversification Opportunities for X FAB and Allianz Technology

0.68

Correlation Coefficient

X FAB  Allianz Technology

Poor diversification

The 3 months correlation between 0ROZ and Allianz is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries 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 X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Allianz Technology go up and down completely randomly.

Pair Corralation between X FAB and Allianz Technology

Assuming the 90 days trading horizon X FAB Silicon Foundries is expected to under-perform the Allianz Technology. In addition to that, X FAB is 1.27 times more volatile than Allianz Technology Trust. It trades about -0.15 of its total potential returns per unit of risk. Allianz Technology Trust is currently generating about -0.1 per unit of volatility. If you would invest  41,900  in Allianz Technology Trust on December 31, 2024 and sell it today you would lose (5,750) from holding Allianz Technology Trust or give up 13.72% of portfolio value over 90 days.

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

X FAB Silicon Foundries  vs.  Allianz Technology Trust

X FAB Silicon

Risk-Adjusted Performance

Very Weak

Over the last 90 days X FAB Silicon Foundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in May 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Allianz Technology Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianz Technology Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with X FAB and Allianz Technology

The main advantage of trading using opposite X FAB and Allianz Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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.

The idea behind X FAB Silicon Foundries and Allianz Technology Trust 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.

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 Stocks Directory module to find actively traded stocks across global markets.