Correlation Between ASML HOLDING and Talanx AG
Can any of the company-specific risk be diversified away by investing in both ASML HOLDING 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 ASML HOLDING and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASML HOLDING NY and Talanx AG, you can compare the effects of market volatilities on ASML HOLDING 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 ASML HOLDING with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASML HOLDING and Talanx AG.
Diversification Opportunities for ASML HOLDING and Talanx AG
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ASML and Talanx is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding ASML HOLDING NY and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and ASML HOLDING 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 ASML HOLDING NY 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 ASML HOLDING i.e., ASML HOLDING and Talanx AG go up and down completely randomly.
Pair Corralation between ASML HOLDING and Talanx AG
Assuming the 90 days trading horizon ASML HOLDING is expected to generate 4.22 times less return on investment than Talanx AG. In addition to that, ASML HOLDING is 1.74 times more volatile than Talanx AG. It trades about 0.02 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.12 per unit of volatility. If you would invest 3,919 in Talanx AG on August 25, 2024 and sell it today you would earn a total of 3,881 from holding Talanx AG or generate 99.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASML HOLDING NY vs. Talanx AG
Performance |
| Timeline |
| ASML HOLDING NY |
| Talanx AG |
ASML HOLDING and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASML HOLDING and Talanx AG
The main advantage of trading using opposite ASML HOLDING and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASML HOLDING 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.| ASML HOLDING vs. TEXAS ROADHOUSE | ASML HOLDING vs. EVS Broadcast Equipment | ASML HOLDING vs. Broadcom | ASML HOLDING vs. Avanos Medical |
| Talanx AG vs. Coeur Mining | Talanx AG vs. Harmony Gold Mining | Talanx AG vs. Apollo Investment Corp | Talanx AG vs. WisdomTree Investments |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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