Correlation Between Postal Savings and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Postal Savings 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 Postal Savings and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Postal Savings Bank and Talanx AG, you can compare the effects of market volatilities on Postal Savings 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 Postal Savings with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Postal Savings and Talanx AG.
Diversification Opportunities for Postal Savings and Talanx AG
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Postal and Talanx is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Postal Savings Bank and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Postal Savings 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 Postal Savings Bank 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 Postal Savings i.e., Postal Savings and Talanx AG go up and down completely randomly.
Pair Corralation between Postal Savings and Talanx AG
Assuming the 90 days horizon Postal Savings Bank is expected to generate 5.28 times more return on investment than Talanx AG. However, Postal Savings is 5.28 times more volatile than Talanx AG. It trades about 0.09 of its potential returns per unit of risk. Talanx AG is currently generating about 0.11 per unit of risk. If you would invest 5.53 in Postal Savings Bank on November 19, 2024 and sell it today you would earn a total of 50.47 from holding Postal Savings Bank or generate 912.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Postal Savings Bank vs. Talanx AG
Performance |
| Timeline |
| Postal Savings Bank |
| Talanx AG |
Postal Savings and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Postal Savings and Talanx AG
The main advantage of trading using opposite Postal Savings and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Postal Savings 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.| Postal Savings vs. RESMINING UNSPADR10 | Postal Savings vs. De Grey Mining | Postal Savings vs. Zijin Mining Group | Postal Savings vs. SLIGRO FOOD GROUP |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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