Correlation Between Loblaw Companies and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Loblaw Companies 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 Loblaw Companies and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loblaw Companies Limited and Talanx AG, you can compare the effects of market volatilities on Loblaw Companies 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 Loblaw Companies with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loblaw Companies and Talanx AG.
Diversification Opportunities for Loblaw Companies and Talanx AG
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Loblaw and Talanx is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Loblaw Companies Limited and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Loblaw Companies 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 Loblaw Companies 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 Loblaw Companies i.e., Loblaw Companies and Talanx AG go up and down completely randomly.
Pair Corralation between Loblaw Companies and Talanx AG
Assuming the 90 days horizon Loblaw Companies Limited is expected to generate 0.87 times more return on investment than Talanx AG. However, Loblaw Companies Limited is 1.15 times less risky than Talanx AG. It trades about 0.12 of its potential returns per unit of risk. Talanx AG is currently generating about 0.08 per unit of risk. If you would invest 8,533 in Loblaw Companies Limited on August 25, 2024 and sell it today you would earn a total of 3,467 from holding Loblaw Companies Limited or generate 40.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loblaw Companies Limited vs. Talanx AG
Performance |
| Timeline |
| Loblaw Companies |
| Talanx AG |
Loblaw Companies and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loblaw Companies and Talanx AG
The main advantage of trading using opposite Loblaw Companies and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loblaw Companies 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.| Loblaw Companies vs. Apyx Medical Corp | Loblaw Companies vs. SCANDMEDICAL SOLDK 040 | Loblaw Companies vs. Aluminum of | Loblaw Companies vs. Japan Medical Dynamic |
| Talanx AG vs. KIMBALL ELECTRONICS | Talanx AG vs. AVITA Medical | Talanx AG vs. Avanos Medical | Talanx AG vs. LG Electronics |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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