Correlation Between Aluminumof China and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Aluminumof China 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 Aluminumof China and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aluminum of and Talanx AG, you can compare the effects of market volatilities on Aluminumof China 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 Aluminumof China with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aluminumof China and Talanx AG.
Diversification Opportunities for Aluminumof China and Talanx AG
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aluminumof and Talanx is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Aluminum of and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Aluminumof China 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 Aluminum of 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 Aluminumof China i.e., Aluminumof China and Talanx AG go up and down completely randomly.
Pair Corralation between Aluminumof China and Talanx AG
Assuming the 90 days horizon Aluminumof China is expected to generate 1.33 times less return on investment than Talanx AG. In addition to that, Aluminumof China is 3.32 times more volatile than Talanx AG. It trades about 0.1 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.46 per unit of volatility. If you would invest 7,050 in Talanx AG on September 3, 2024 and sell it today you would earn a total of 915.00 from holding Talanx AG or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aluminum of vs. Talanx AG
Performance |
| Timeline |
| Aluminumof China |
| Talanx AG |
Aluminumof China and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aluminumof China and Talanx AG
The main advantage of trading using opposite Aluminumof China and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aluminumof China 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.| Aluminumof China vs. TITANIUM TRANSPORTGROUP | Aluminumof China vs. TSOGO SUN GAMING | Aluminumof China vs. Media and Games | Aluminumof China vs. UNIVMUSIC GRPADR050 |
| Talanx AG vs. Gamma Communications plc | Talanx AG vs. GALENA MINING LTD | Talanx AG vs. Jacquet Metal Service | Talanx AG vs. COMBA TELECOM SYST |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |