Correlation Between Lowes Companies and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Lowes 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 Lowes 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 Lowes Companies and Talanx AG, you can compare the effects of market volatilities on Lowes 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 Lowes Companies with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowes Companies and Talanx AG.
Diversification Opportunities for Lowes Companies and Talanx AG
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lowes and Talanx is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Lowes Companies and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Lowes 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 Lowes Companies 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 Lowes Companies i.e., Lowes Companies and Talanx AG go up and down completely randomly.
Pair Corralation between Lowes Companies and Talanx AG
If you would invest 7,445 in Talanx AG on September 5, 2024 and sell it today you would earn a total of 600.00 from holding Talanx AG or generate 8.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.78% |
| Values | Daily Returns |
Lowes Companies vs. Talanx AG
Performance |
| Timeline |
| Lowes Companies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Talanx AG |
Lowes Companies and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowes Companies and Talanx AG
The main advantage of trading using opposite Lowes Companies and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowes 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.| Lowes Companies vs. KINGBOARD CHEMICAL | Lowes Companies vs. Quaker Chemical | Lowes Companies vs. NISSAN CHEMICAL IND | Lowes Companies vs. SEKISUI CHEMICAL |
| Talanx AG vs. SLR Investment Corp | Talanx AG vs. PennantPark Investment | Talanx AG vs. CVS Health | Talanx AG vs. CeoTronics AG |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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