Correlation Between Allianz Technology and Boston Scientific

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

Diversification Opportunities for Allianz Technology and Boston Scientific

0.3

Correlation Coefficient

Allianz Technology  Boston Scientific

Weak diversification

The 3 months correlation between Allianz and Boston is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Allianz Technology Trust and Boston Scientific Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Scientific Corp 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 Boston Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Scientific Corp has no effect on the direction of Allianz Technology i.e., Allianz Technology and Boston Scientific go up and down completely randomly.

Pair Corralation between Allianz Technology and Boston Scientific

Assuming the 90 days trading horizon Allianz Technology Trust is expected to under-perform the Boston Scientific. In addition to that, Allianz Technology is 1.26 times more volatile than Boston Scientific Corp. It trades about -0.09 of its total potential returns per unit of risk. Boston Scientific Corp is currently generating about 0.11 per unit of volatility. If you would invest  9,094  in Boston Scientific Corp on December 24, 2024 and sell it today you would earn a total of  964.00  from holding Boston Scientific Corp or generate 10.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Allianz Technology Trust  vs.  Boston Scientific Corp

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 latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Boston Scientific Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Boston Scientific Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Boston Scientific may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Allianz Technology and Boston Scientific

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

The idea behind Allianz Technology Trust and Boston Scientific Corp 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.