Correlation Between CAIXABANK UNADR and Talanx AG
Can any of the company-specific risk be diversified away by investing in both CAIXABANK UNADR 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 CAIXABANK UNADR and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAIXABANK UNADR 13 and Talanx AG, you can compare the effects of market volatilities on CAIXABANK UNADR 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 CAIXABANK UNADR with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAIXABANK UNADR and Talanx AG.
Diversification Opportunities for CAIXABANK UNADR and Talanx AG
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CAIXABANK and Talanx is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding CAIXABANK UNADR 13 and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and CAIXABANK UNADR 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 CAIXABANK UNADR 13 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 CAIXABANK UNADR i.e., CAIXABANK UNADR and Talanx AG go up and down completely randomly.
Pair Corralation between CAIXABANK UNADR and Talanx AG
Assuming the 90 days trading horizon CAIXABANK UNADR 13 is expected to under-perform the Talanx AG. In addition to that, CAIXABANK UNADR is 1.58 times more volatile than Talanx AG. It trades about -0.24 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.46 per unit of volatility. If you would invest 7,050 in Talanx AG on September 3, 2024 and sell it today you would earn a total of 915.00 from holding Talanx AG or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAIXABANK UNADR 13 vs. Talanx AG
Performance |
| Timeline |
| CAIXABANK UNADR 13 |
| Talanx AG |
CAIXABANK UNADR and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAIXABANK UNADR and Talanx AG
The main advantage of trading using opposite CAIXABANK UNADR and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAIXABANK UNADR 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.| CAIXABANK UNADR vs. Postal Savings Bank | CAIXABANK UNADR vs. Superior Plus Corp | CAIXABANK UNADR vs. NMI Holdings | CAIXABANK UNADR 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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