Correlation Between Food Life and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Food Life and Talanx AG 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 Food Life and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Food Life Companies and Talanx AG, you can compare the effects of market volatilities on Food Life and Talanx AG 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 Food Life with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Food Life and Talanx AG.
Diversification Opportunities for Food Life and Talanx AG
Very good diversification
The 3 months correlation between Food and Talanx is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Food Life Companies and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Food Life 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 Food Life Companies are associated (or correlated) with Talanx AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talanx AG has no effect on the direction of Food Life i.e., Food Life and Talanx AG go up and down completely randomly.
Pair Corralation between Food Life and Talanx AG
Assuming the 90 days horizon Food Life is expected to generate 1.15 times less return on investment than Talanx AG. In addition to that, Food Life is 1.47 times more volatile than Talanx AG. It trades about 0.18 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.31 per unit of volatility. If you would invest 7,210 in Talanx AG on August 25, 2024 and sell it today you would earn a total of 675.00 from holding Talanx AG or generate 9.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Food Life Companies vs. Talanx AG
Performance |
| Timeline |
| Food Life Companies |
| Talanx AG |
Food Life and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Food Life and Talanx AG
The main advantage of trading using opposite Food Life and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Food Life position performs unexpectedly, Talanx AG 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 Talanx AG will offset losses from the drop in Talanx AG's long position.| Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings | Food Life vs. Origin Agritech | Food Life vs. SIVERS SEMICONDUCTORS AB |
| Talanx AG vs. KIMBALL ELECTRONICS | Talanx AG vs. AVITA Medical | Talanx AG vs. Avanos Medical | Talanx AG vs. LG Electronics |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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