Correlation Between Macquarie Group and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Macquarie Group 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 Macquarie Group and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Limited and Talanx AG, you can compare the effects of market volatilities on Macquarie Group 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 Macquarie Group with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and Talanx AG.
Diversification Opportunities for Macquarie Group and Talanx AG
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macquarie and Talanx is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Limited and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Macquarie Group 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 Macquarie Group Limited 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 Macquarie Group i.e., Macquarie Group and Talanx AG go up and down completely randomly.
Pair Corralation between Macquarie Group and Talanx AG
Assuming the 90 days horizon Macquarie Group is expected to generate 1.57 times less return on investment than Talanx AG. In addition to that, Macquarie Group is 1.17 times more volatile than Talanx AG. It trades about 0.06 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.1 per unit of volatility. If you would invest 4,050 in Talanx AG on August 29, 2024 and sell it today you would earn a total of 3,820 from holding Talanx AG or generate 94.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Limited vs. Talanx AG
Performance |
| Timeline |
| Macquarie Group |
| Talanx AG |
Macquarie Group and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and Talanx AG
The main advantage of trading using opposite Macquarie Group and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group 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.| Macquarie Group vs. MSCI Inc | Macquarie Group vs. Superior Plus Corp | Macquarie Group vs. NMI Holdings | Macquarie Group vs. Origin Agritech |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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