Correlation Between AECOM and Talanx AG
Can any of the company-specific risk be diversified away by investing in both AECOM 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 AECOM and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECOM and Talanx AG, you can compare the effects of market volatilities on AECOM 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 AECOM with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM and Talanx AG.
Diversification Opportunities for AECOM and Talanx AG
Very good diversification
The 3 months correlation between AECOM and Talanx is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AECOM and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and AECOM 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 AECOM 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 AECOM i.e., AECOM and Talanx AG go up and down completely randomly.
Pair Corralation between AECOM and Talanx AG
Assuming the 90 days horizon AECOM is expected to generate 2.16 times more return on investment than Talanx AG. However, AECOM is 2.16 times more volatile than Talanx AG. It trades about 0.24 of its potential returns per unit of risk. Talanx AG is currently generating about 0.33 per unit of risk. If you would invest 9,600 in AECOM on August 29, 2024 and sell it today you would earn a total of 1,500 from holding AECOM or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECOM vs. Talanx AG
Performance |
| Timeline |
| AECOM |
| Talanx AG |
AECOM and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECOM and Talanx AG
The main advantage of trading using opposite AECOM and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM 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.| AECOM vs. China Railway Construction | AECOM vs. Superior Plus Corp | AECOM vs. NMI Holdings | AECOM vs. Origin Agritech |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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