Correlation Between CSL and Talanx AG
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL Limited and Talanx AG, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Talanx AG.
Diversification Opportunities for CSL and Talanx AG
Modest diversification
The 3 months correlation between CSL and Talanx is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CSL Limited and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and CSL 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 CSL 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 CSL i.e., CSL and Talanx AG go up and down completely randomly.
Pair Corralation between CSL and Talanx AG
Assuming the 90 days horizon CSL is expected to generate 157.89 times less return on investment than Talanx AG. But when comparing it to its historical volatility, CSL Limited is 1.03 times less risky than Talanx AG. It trades about 0.0 of its potential returns per unit of risk. Talanx AG is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,031 in Talanx AG on August 28, 2024 and sell it today you would earn a total of 3,839 from holding Talanx AG or generate 95.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL Limited vs. Talanx AG
Performance |
| Timeline |
| CSL Limited |
| Talanx AG |
CSL and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Talanx AG
The main advantage of trading using opposite CSL and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.| CSL vs. Superior Plus Corp | CSL vs. NMI Holdings | CSL vs. Origin Agritech | CSL vs. SIVERS SEMICONDUCTORS AB |
| Talanx AG vs. EAST SIDE GAMES | Talanx AG vs. Hochschild Mining plc | Talanx AG vs. National Beverage Corp | Talanx AG vs. The Boston Beer |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |