Correlation Between Allianz Technology and Systemair

Can any of the company-specific risk be diversified away by investing in both Allianz Technology and Systemair 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 Systemair 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 Systemair AB, you can compare the effects of market volatilities on Allianz Technology and Systemair 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 Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz Technology and Systemair.

Diversification Opportunities for Allianz Technology and Systemair

-0.42

Correlation Coefficient

Allianz Technology  Systemair

Very good diversification

The 3 months correlation between Allianz and Systemair is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB 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 Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Allianz Technology i.e., Allianz Technology and Systemair go up and down completely randomly.

Pair Corralation between Allianz Technology and Systemair

Assuming the 90 days trading horizon Allianz Technology Trust is expected to generate 0.72 times more return on investment than Systemair. However, Allianz Technology Trust is 1.38 times less risky than Systemair. It trades about -0.02 of its potential returns per unit of risk. Systemair AB is currently generating about -0.15 per unit of risk. If you would invest  41,550  in Allianz Technology Trust on December 4, 2024 and sell it today you would lose (1,300) from holding Allianz Technology Trust or give up 3.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Allianz Technology Trust  vs.  Systemair AB

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 rather sound technical and fundamental indicators, Allianz Technology is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Systemair AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Systemair AB 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Allianz Technology and Systemair

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

The idea behind Allianz Technology Trust and Systemair AB 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.