Correlation Between Loews Corp and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Talanx AG, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Talanx AG.
Diversification Opportunities for Loews Corp and Talanx AG
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loews and Talanx is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Talanx AG go up and down completely randomly.
Pair Corralation between Loews Corp and Talanx AG
Assuming the 90 days horizon Loews Corp is expected to generate 1.46 times more return on investment than Talanx AG. However, Loews Corp is 1.46 times more volatile than Talanx AG. It trades about 0.34 of its potential returns per unit of risk. Talanx AG is currently generating about 0.46 per unit of risk. If you would invest 7,244 in Loews Corp on September 3, 2024 and sell it today you would earn a total of 1,006 from holding Loews Corp or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Talanx AG
Performance |
| Timeline |
| Loews Corp |
| Talanx AG |
Loews Corp and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Talanx AG
The main advantage of trading using opposite Loews Corp and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. ETFS Coffee ETC | Loews Corp vs. The Trade Desk | Loews Corp vs. Salesforce | Loews Corp vs. WillScot Mobile Mini |
| Talanx AG vs. Gamma Communications plc | Talanx AG vs. GALENA MINING LTD | Talanx AG vs. Jacquet Metal Service | Talanx AG vs. COMBA TELECOM SYST |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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