Correlation Between Allianz SE and S A P

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

By analyzing existing cross correlation between Allianz SE and SAP SE, you can compare the effects of market volatilities on Allianz SE and S A P 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 SE with a short position of S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allianz SE and S A P.

Diversification Opportunities for Allianz SE and S A P

0.56

Correlation Coefficient

Allianz SE  S A P

Very weak diversification

The 3 months correlation between Allianz and SAP is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Allianz SE and SAP SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAP SE and Allianz SE 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 SE are associated (or correlated) with S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAP SE has no effect on the direction of Allianz SE i.e., Allianz SE and S A P go up and down completely randomly.

Pair Corralation between Allianz SE and S A P

Assuming the 90 days horizon Allianz SE is expected to generate 86.61 times less return on investment than S A P. But when comparing it to its historical volatility, Allianz SE is 1.32 times less risky than S A P. It trades about 0.0 of its potential returns per unit of risk. SAP SE is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  23,734  in SAP SE on April 24, 2025 and sell it today you would earn a total of  2,336  from holding SAP SE or generate 9.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Allianz SE  vs.  SAP SE

Allianz SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allianz SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Allianz SE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

SAP SE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SAP SE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, S A P may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Allianz SE and S A P

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

The idea behind Allianz SE and SAP SE 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.