Correlation Between CDN IMPERIAL and Talanx AG
Can any of the company-specific risk be diversified away by investing in both CDN IMPERIAL 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 CDN IMPERIAL and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDN IMPERIAL BANK and Talanx AG, you can compare the effects of market volatilities on CDN IMPERIAL 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 CDN IMPERIAL with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDN IMPERIAL and Talanx AG.
Diversification Opportunities for CDN IMPERIAL and Talanx AG
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between CDN and Talanx is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding CDN IMPERIAL BANK and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL i.e., CDN IMPERIAL and Talanx AG go up and down completely randomly.
Pair Corralation between CDN IMPERIAL and Talanx AG
Assuming the 90 days trading horizon CDN IMPERIAL is expected to generate 2.54 times less return on investment than Talanx AG. But when comparing it to its historical volatility, CDN IMPERIAL BANK is 1.45 times less risky than Talanx AG. It trades about 0.26 of its potential returns per unit of risk. Talanx AG is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest 7,060 in Talanx AG on August 30, 2024 and sell it today you would earn a total of 935.00 from holding Talanx AG or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CDN IMPERIAL BANK vs. Talanx AG
Performance |
| Timeline |
| CDN IMPERIAL BANK |
| Talanx AG |
CDN IMPERIAL and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDN IMPERIAL and Talanx AG
The main advantage of trading using opposite CDN IMPERIAL and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDN IMPERIAL 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.| CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Apple Inc | CDN IMPERIAL vs. Superior Plus Corp | CDN IMPERIAL vs. SIVERS SEMICONDUCTORS AB |
| Talanx AG vs. CDN IMPERIAL BANK | Talanx AG vs. LIFEWAY FOODS | Talanx AG vs. Commonwealth Bank of | Talanx AG vs. Mizuho Financial Group |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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