Correlation Between LIFEWAY FOODS and Talanx AG
Can any of the company-specific risk be diversified away by investing in both LIFEWAY FOODS 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 LIFEWAY FOODS and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFEWAY FOODS and Talanx AG, you can compare the effects of market volatilities on LIFEWAY FOODS 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 LIFEWAY FOODS with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFEWAY FOODS and Talanx AG.
Diversification Opportunities for LIFEWAY FOODS and Talanx AG
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFEWAY and Talanx is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding LIFEWAY FOODS and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and LIFEWAY FOODS 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 LIFEWAY FOODS 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 LIFEWAY FOODS i.e., LIFEWAY FOODS and Talanx AG go up and down completely randomly.
Pair Corralation between LIFEWAY FOODS and Talanx AG
Assuming the 90 days trading horizon LIFEWAY FOODS is expected to generate 4.23 times more return on investment than Talanx AG. However, LIFEWAY FOODS is 4.23 times more volatile than Talanx AG. It trades about 0.07 of its potential returns per unit of risk. Talanx AG is currently generating about 0.12 per unit of risk. If you would invest 520.00 in LIFEWAY FOODS on November 28, 2024 and sell it today you would earn a total of 1,470 from holding LIFEWAY FOODS or generate 282.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFEWAY FOODS vs. Talanx AG
Performance |
| Timeline |
| LIFEWAY FOODS |
| Talanx AG |
LIFEWAY FOODS and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFEWAY FOODS and Talanx AG
The main advantage of trading using opposite LIFEWAY FOODS and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFEWAY FOODS 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.| LIFEWAY FOODS vs. Yuexiu Transport Infrastructure | LIFEWAY FOODS vs. JD SPORTS FASH | LIFEWAY FOODS vs. Nippon Light Metal | LIFEWAY FOODS vs. GRUPO CARSO A1 |
| Talanx AG vs. PANIN INSURANCE | Talanx AG vs. Hyster Yale Materials Handling | Talanx AG vs. BJs Restaurants | Talanx AG vs. Insurance Australia Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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