Correlation Between China Railway and Talanx AG
Can any of the company-specific risk be diversified away by investing in both China Railway 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 China Railway and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Railway Construction and Talanx AG, you can compare the effects of market volatilities on China Railway 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 China Railway with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Railway and Talanx AG.
Diversification Opportunities for China Railway and Talanx AG
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Talanx is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding China Railway Construction and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and China Railway 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 China Railway Construction 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 China Railway i.e., China Railway and Talanx AG go up and down completely randomly.
Pair Corralation between China Railway and Talanx AG
If you would invest 7,080 in Talanx AG on September 1, 2024 and sell it today you would earn a total of 855.00 from holding Talanx AG or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Railway Construction vs. Talanx AG
Performance |
| Timeline |
| China Railway Constr |
| Talanx AG |
China Railway and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Railway and Talanx AG
The main advantage of trading using opposite China Railway and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Railway 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.| China Railway vs. Sekisui Chemical Co | China Railway vs. Compugroup Medical SE | China Railway vs. Sanyo Chemical Industries | China Railway vs. CompuGroup Medical SE |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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