Correlation Between Mercedes Benz and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz 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 Mercedes Benz and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group AG and Talanx AG, you can compare the effects of market volatilities on Mercedes Benz 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 Mercedes Benz with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Talanx AG.
Diversification Opportunities for Mercedes Benz and Talanx AG
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mercedes and Talanx is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group AG and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Mercedes Benz 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 Mercedes Benz Group AG 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 Mercedes Benz i.e., Mercedes Benz and Talanx AG go up and down completely randomly.
Pair Corralation between Mercedes Benz and Talanx AG
Assuming the 90 days horizon Mercedes Benz Group AG is expected to under-perform the Talanx AG. But the stock apears to be less risky and, when comparing its historical volatility, Mercedes Benz Group AG is 1.09 times less risky than Talanx AG. The stock trades about -0.03 of its potential returns per unit of risk. The Talanx AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 6,017 in Talanx AG on August 29, 2024 and sell it today you would earn a total of 1,953 from holding Talanx AG or generate 32.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mercedes Benz Group AG vs. Talanx AG
Performance |
| Timeline |
| Mercedes Benz Group |
| Talanx AG |
Mercedes Benz and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and Talanx AG
The main advantage of trading using opposite Mercedes Benz and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz 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.| Mercedes Benz vs. Global Ship Lease | Mercedes Benz vs. ALBIS LEASING AG | Mercedes Benz vs. Consolidated Communications Holdings | Mercedes Benz vs. GOODYEAR T RUBBER |
| Talanx AG vs. Sabra Health Care | Talanx AG vs. Verizon Communications | Talanx AG vs. Natural Health Trends | Talanx AG vs. Bausch Health Companies |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |