Correlation Between China Resources and Talanx AG
Can any of the company-specific risk be diversified away by investing in both China Resources 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 Resources 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 Resources Land and Talanx AG, you can compare the effects of market volatilities on China Resources 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 Resources with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Resources and Talanx AG.
Diversification Opportunities for China Resources and Talanx AG
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Talanx is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding China Resources Land and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and China Resources 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 Resources Land 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 Resources i.e., China Resources and Talanx AG go up and down completely randomly.
Pair Corralation between China Resources and Talanx AG
Assuming the 90 days horizon China Resources Land is expected to generate 3.22 times more return on investment than Talanx AG. However, China Resources is 3.22 times more volatile than Talanx AG. It trades about 0.05 of its potential returns per unit of risk. Talanx AG is currently generating about 0.1 per unit of risk. If you would invest 137.00 in China Resources Land on September 2, 2024 and sell it today you would earn a total of 135.00 from holding China Resources Land or generate 98.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Resources Land vs. Talanx AG
Performance |
| Timeline |
| China Resources Land |
| Talanx AG |
China Resources and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Resources and Talanx AG
The main advantage of trading using opposite China Resources and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Resources 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 Resources vs. NXP Semiconductors NV | China Resources vs. Daito Trust Construction | China Resources vs. Chongqing Machinery Electric | China Resources vs. Elmos Semiconductor SE |
| Talanx AG vs. GameStop Corp | Talanx AG vs. Spirent Communications plc | Talanx AG vs. International Game Technology | Talanx AG vs. PENN NATL GAMING |
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 Stocks Directory module to find actively traded stocks across global markets.
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