Correlation Between CN YANGTPWR and Talanx AG
Can any of the company-specific risk be diversified away by investing in both CN YANGTPWR 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 CN YANGTPWR and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN YANGTPWR GDR and Talanx AG, you can compare the effects of market volatilities on CN YANGTPWR 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 CN YANGTPWR with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN YANGTPWR and Talanx AG.
Diversification Opportunities for CN YANGTPWR and Talanx AG
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CYZB and Talanx is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CN YANGTPWR GDR and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and CN YANGTPWR 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 CN YANGTPWR GDR 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 CN YANGTPWR i.e., CN YANGTPWR and Talanx AG go up and down completely randomly.
Pair Corralation between CN YANGTPWR and Talanx AG
Assuming the 90 days trading horizon CN YANGTPWR is expected to generate 8.9 times less return on investment than Talanx AG. But when comparing it to its historical volatility, CN YANGTPWR GDR is 1.22 times less risky than Talanx AG. It trades about 0.05 of its potential returns per unit of risk. Talanx AG is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 7,140 in Talanx AG on August 29, 2024 and sell it today you would earn a total of 830.00 from holding Talanx AG or generate 11.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CN YANGTPWR GDR vs. Talanx AG
Performance |
| Timeline |
| CN YANGTPWR GDR |
| Talanx AG |
CN YANGTPWR and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN YANGTPWR and Talanx AG
The main advantage of trading using opposite CN YANGTPWR and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN YANGTPWR 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.| CN YANGTPWR vs. Verizon Communications | CN YANGTPWR vs. United Natural Foods | CN YANGTPWR vs. SBA Communications Corp | CN YANGTPWR vs. Iridium Communications |
| Talanx AG vs. Sabra Health Care | Talanx AG vs. Verizon Communications | Talanx AG vs. Natural Health Trends | Talanx AG vs. Bausch Health Companies |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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