Correlation Between Swiss Life and Talanx AG
Can any of the company-specific risk be diversified away by investing in both Swiss Life 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 Swiss Life and Talanx AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swiss Life Holding and Talanx AG, you can compare the effects of market volatilities on Swiss Life 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 Swiss Life with a short position of Talanx AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swiss Life and Talanx AG.
Diversification Opportunities for Swiss Life and Talanx AG
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Swiss and Talanx is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Life Holding and Talanx AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talanx AG and Swiss Life 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 Swiss Life Holding 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 Swiss Life i.e., Swiss Life and Talanx AG go up and down completely randomly.
Pair Corralation between Swiss Life and Talanx AG
Assuming the 90 days trading horizon Swiss Life is expected to generate 2.27 times less return on investment than Talanx AG. In addition to that, Swiss Life is 1.32 times more volatile than Talanx AG. It trades about 0.12 of its total potential returns per unit of risk. Talanx AG is currently generating about 0.37 per unit of volatility. If you would invest 7,065 in Talanx AG on September 5, 2024 and sell it today you would earn a total of 1,075 from holding Talanx AG or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swiss Life Holding vs. Talanx AG
Performance |
| Timeline |
| Swiss Life Holding |
| Talanx AG |
Swiss Life and Talanx AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swiss Life and Talanx AG
The main advantage of trading using opposite Swiss Life and Talanx AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swiss Life 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.| Swiss Life vs. WisdomTree Investments | Swiss Life vs. AWILCO DRILLING PLC | Swiss Life vs. ECHO INVESTMENT ZY | Swiss Life vs. BORR DRILLING NEW |
| Talanx AG vs. VIRG NATL BANKSH | Talanx AG vs. National Bank Holdings | Talanx AG vs. MCEWEN MINING INC | Talanx AG vs. Regions Financial |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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