Correlation Between Longfor Group and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Longfor Group 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 Longfor Group and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Longfor Group Holdings and Talanx AG, you can compare the effects of market volatilities on Longfor Group 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 Longfor Group with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Longfor Group and Talanx AG.
Diversification Opportunities for Longfor Group and Talanx AG
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Longfor and Talanx is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Longfor Group Holdings and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Longfor Group 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 Longfor Group Holdings 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 Longfor Group i.e., Longfor Group and Talanx AG go up and down completely randomly.
Pair Corralation between Longfor Group and Talanx AG
Assuming the 90 days horizon Longfor Group Holdings is expected to under-perform the Talanx AG. In addition to that, Longfor Group is 2.91 times more volatile than Talanx AG. It trades about -0.17 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.33 per unit of volatility. If you would invest 7,140 in Talanx AG on August 29, 2024 and sell it today you would earn a total of 730.00 from holding Talanx AG or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Longfor Group Holdings vs. Talanx AG
Performance |
| Timeline |
| Longfor Group Holdings |
| Talanx AG |
Longfor Group and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Longfor Group and Talanx AG
The main advantage of trading using opposite Longfor Group and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Longfor Group 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.| Longfor Group vs. ETFS Coffee ETC | Longfor Group vs. Zijin Mining Group | Longfor Group vs. LGI Homes | Longfor Group vs. GALENA MINING LTD |
| Talanx AG vs. EAST SIDE GAMES | Talanx AG vs. Hochschild Mining plc | Talanx AG vs. National Beverage Corp | Talanx AG vs. The Boston Beer |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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